Final answer:
The Internal Rate of Return (IRR) for the project can be calculated using financial software or a business calculator with an IRR function, as it requires solving for the rate at which the net present value of cash flows is zero. The IRR provides an estimate of the project's rate of return compared to the company's required return.
Step-by-step explanation:
The Internal Rate of Return (IRR) is a financial metric used to evaluate the attractiveness of a project or investment. It is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero. To find the IRR of a project with an initial cost of $50,100 and subsequent cash flows of $10,200 in Year 1, $18,750 in Year 2, $13,300 in Year 3, $13,520 in Year 4, and $7,400 in Year 5, one would typically use financial software or a business calculator that has an IRR function, as the calculation involves solving a polynomial equation that does not have an analytical solution.
The IRR is an estimate of the project's rate of return and is used to compare the profitability of different projects. In this case, the IRR would tell us the percentage rate of return earned by the project over its life. If the IRR is higher than the company's required rate of return, the project would be considered acceptable.