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An indium-gallium-arsenide-nitrogen alloy developed at Sandia National Laboratory is said to have potential uses in electricity-generating...

An indium-gallium-arsenide-nitrogen alloy developed at Sandia National Laboratory is said to have potential uses in electricity-generating solar cells. The new material is expected to have a longer life, and it is believed to have a 40% efficiency rate, which is nearly twice that of standard silicon solar cells. The useful life of a telecommunications satellite could be extended from 10 to 15 years by using the new solar cells. What rate of return could be realized if an extra investment now of $860,000 would result in extra revenues of $450,000 in year 11, $500,000 in year 12, and amounts increasing by $50,000 per year through year 15?

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Answer #1

IRR represents the internal rate of return for the series of cash flow and can be calculated using excel as follows

So, the rate of return is 9.28%

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