Refer to Giant Tiger in S12-13. What is the approximate internal rate of return (IRR) of the
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In S12-13 The local Giant Tiger department store is considering investing in self-checkout kiosks for its customers. The self-check-out kiosks will cost $45,000 and have no residual value. Management expects the equipment to result in net cash savings over three years as customers grow accustomed to using the new technology: $14,000 the first year; $19,000 the second year; $24,000 the third year. Assuming a 10% discount rate, what is the NPV of the kiosk investment? Is this a favourable investment? Why or why not?
Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment...
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Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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