Question

A TES (Thermal Energy Storage) system is installed that will cost $89,000 and is projected to save $35,684 annually for the life of the project of 18 years. What is the exact Internal Rate of Return (IRR)

Answer 1

the exact internal rate of return is 40%

Step-by-step explanation:

The computation of the exact internal rate of return is shown below

Given that

Initial investment = -$89,000

Year 1 to Year 18 = $35,684 each year

Based on the above information

We use the IRR formula

= IRR()

After applying the internal rate of return formula, the exact internal rate of return is 40%

So the same is considered and relevant too