Your company is considering a project which requires a $30,000 initial investment with a predicted salvage value at the end of its six year useful life of $8,000. you expect an annual return of $6,000 for the six year study period. additionally, the equipment will require an overhaul costing $1,000 at the end of the third year. evaluate the project using the irr method and a marr of 8.5%.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

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