The Introduction of a New Product Requires an Immediate Outlay

Essay

The introduction of a new product requires an immediate outlay of $145 000 and has a residual value of $30 000 after 10 years. The anticipated net returns from the marketing of the product are expected to be $25 500 per year for ten years. What is the rate of return on the investment (correct to the nearest tenth of a percent)?
a) Use linear interpolation to find the approximate value of the rate of return.
b) Find the answer using Cash Flow and IRR.