Asked by Hannah Turner on Apr 27, 2024
Verified
A project is estimated to cost $273,840 and provide annual net cash inflows of $60,000 for 7 years. Determine the internal rate of return for this project, using the following present value of an annuity table.
Present Value of Annuity
The current worth of a stream of equal payments made at regular intervals, discounted at a specific interest rate.
- Determine the internal rate of return for investment proposals.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
12% [($273,840 ÷ $60,000) = 4.564, the present value of an annuity factor for 7 years at 12%]
Learning Objectives
- Determine the internal rate of return for investment proposals.
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