Question

Curly’s Cheese Company is conducting its annual strategic planning session.

Executives are planning on expanding operations which will cost $300,000 now and

$50,000 more at the end of year 5. Curly’s executives believe the added capacity will result in $50,000 of revenue in year one and that revenue will grow by $5,000 a year through year 10. What is the IRR for this opportunity? If Curly’s could invest their money and receive a 15% return instead, should Curly’s expand?

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