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Microwave Oven​ Programming, Inc. is considering the construction of a new plant. The plant will have...

Microwave Oven​ Programming, Inc. is considering the construction of a new plant. The plant will have an initial cash outlay of ​$12 ​million, and will produce cash flows of ​$4 million at the end of year​ 1, $ 5 million at the end of year​ 2, and ​$3 million at the end of years 3 through 5. What is the internal rate of return on this new​ plant?

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Expert Solution

Solution:

The Internal rate of return on this new​ plant = 16.66 %

= 17 % ( when rounded off to the nearest whole number )

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 1 year ago
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