Q8 You are looking at purchasing at investing some money you have in a infrastructure project...

Q8 You are looking at purchasing at investing some money you have in a infrastructure project that a firm you know is running. The project involves an up-front cost of $15,568.80. There are three additional costs that are required: $13,388.20 in year 7, $13,530.22 in year 9 and $24,011.86 in the second last year (it's a 20 year long project). The income from being a part of this project is $21,612.88 per annum, increasing annually by $562.31. What is the AW of this option, given a cost of capital of 5%?

Answer:

(22,581.21)

Take a look at Q8 , and determine the IRR of this. You can use excel, but show both your yearly values and the indicate which cells the IRR function is used on for full marks.

Expert Solution

Based on the given data, the IRR of this project with life of 20 years is 141.08%

jeff jeffy answered 2 years ago

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