Question

- NewTech has a new product that has incurred R&D expenses of $375,000. An additional $500,000 is needed if the product is to proceed. Initial sales will be $50,000 per month, and they will increase by $5000 per month. The market is moving fast, and the product will be closed out in 2 years. What is the new product’s IRR for deciding whether to proceed?

Answer #1

Alternate method

IRR value can be easily arrived using Excel Sheet

Enter Value in each column

Initial investment to be in negative

Annual return in positive

use Excel formula for percentage u will arrive at IRR

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Multiple Choice
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