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Business, 02.07.2019 19:10 hillmarilyn70pe8sy6

The expresso roast corporation (erc) is considering expanding its product lines by acquiring mellow-man tea. the company’s founder is obscenely wealthy and will operate these lines for only one year before retiring and will therefore use only a one-year planning horizon. mellow-man tea has a cost of $80,000 and is expected to produce benefits in one year of $65,000. while this line is not as immediately profitable as the other alternative, it is estimated that this line could be sold upon the founder’s retirement in one year for $20,000. the health benefits of tea make this a less risky investment and erc’s cfo has recommended a risk-premium of 10%. all future cash benefits will occur at the end of the year. the rate of return on us t-bills is 4%. what is the irr for this investment? just enter the number and sign of your answer. give your answer in percents (do not use the percent sign).

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