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

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

Fast Forward 2. Access Polaris’ financial statements for fiscal years ended after December 31, 2011, from its Website (Polaris.com) or the SEC’s Website (SEC.gov).

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

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