Given the popularity of IRR, you have decided to use it toevaluate a project. The cashflows from the project will be $40k,$42k and $28k in years 1 through 3. After that the project willyield cashflows of $20k per year, forever. The project’s initialcost is $450k and the firm’s opportunity cost/hurdle rate is 7%.Write down the equation used to solve for the IRR (do not solve forthe actual IRR). Does the project have conventional cashflows?
