Math Is Fun Forum

KellyK

Guest

Calculating IRR

Hey!

I've got a homework here that I puzzle with. I need to find if purchasing a device will be a good idea or not and to do it I need to calculate the IRR. And here's where I get stuck:
I have the formula for it, but I don't understand what is given and how am I supposed to use the data in solving my homework.

A company wants to buy a device for 15 000 USD and is planning to use it for 10 years.

Yearly sale (units)    8000,00
Sales price of a unit    20,00
Purchasing the device
Details about costs:
Materials per unit        8,00
Operating costs per unit  6,00 (when purchasing a device 5,50)
Variable general costs    2,00
Fixed costs per year  12000,00

Thanks for good advice in advance!

iamaditya

Member

From: Planet Mars

Registered: 2016-11-15

Posts: 821

Re: Calculating IRR

Again what is IRR?

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KellyK

Member

Registered: 2017-04-01

Posts: 4

Re: Calculating IRR

For Clarification:

IRR- Internal Rate of Return