Answer to Question #211344 in Economics of Enterprise for Abel

Question

a new project would required an investment of birr 430million in an asset and would produce an annual after tax net benefit of birr 77.4million over a service life of 10 years. when the project ends the net profit from the sell of the asset would be birr 43million. and additional 120.4million birr at 8 years hence. all costs and benefits are described by cash flow diagram. compute the rate return of this project.

Answer 1

Rate of Return =65%