Business Math Lesson 19: Investment Decisions II, part 2
Channel: Amy Goldlist
Date: 2021-05-27

You are considering an investment in a gardening business.  You estimate your start-up costs to be $160,301.96.  You expect rent and electricity charges to be $15,000 per year payable at the beginning of the year for 7 years.  You expect revenue to be $50,000 per year for 7 years at which time you will sell your equipment for $15,000.  Your MARR is 12%.
a. Calculate the NPV for the business – should you invest?

b. What is the IRR?