Assume Apple invested $2.12 billion to expand its manufacturing capacity. Assume that these assets have a 10-year life and that Apple requires a 10% internal rate of return on these assets.

Required 1. What is the amount of annual cash flows that Apple must earn from these projects to have a 10% internal rate of return? (Hint: Identify the 10-period, 10% factor from the present value of an annuity table, and then divide $2.12 billion by this factor to get the annual cash flows necessary.)

Fast Forward 2. Access Apple’s financial statements for fiscal years ended after September 26, 2015, from its website

(Apple.com) or the SEC’s website (SEC.gov).

a. Determine the amount that Apple invested in capital assets for the most recent year. (Hint: Refer to the statement of cash flows.)

b. Assume a 10-year life and a 10% internal rate of return. What is the amount of cash flows that Apple must earn on these new projects?