SHOW ALL STEPS AND USE EQUATIONS
A company said it plans to spend $20.7 million in expanding its fiber-optic Internet and television network. It will make the company more competitive than other TV providers and will generate net annual revenue of $4.35 million per year. And the salvage value will be $3 million after the 15 year project life.
a) Determine the IRR for the company. Please use interpolation.
b) If the company requires at least a 10% return on its investments, should the company carry out the investment? Why?