Tanya Sinclair, owner of Sinclair Fine Wine, is considering investing ($ 79,137) in a temperature controlled wine

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Tanya Sinclair, owner of Sinclair Fine Wine, is considering investing \(\$ 79,137\) in a temperature controlled wine storage room. She plans to rent space to customers and expects to generate \(\$ 22,500\) annually (rental charges less miscellaneous expenses other than depreciation).

Required

a. Assuming Tanya wishes to evaluate the project with a five-year time horizon, what is the internal rate of return of the investment (ignore taxes)?

b. Should Tanya make the investment if her required rate of return is 12 percent?

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Related Book For  book-img-for-question

Managerial Accounting

ISBN: 12

3rd Edition

Authors: James Jiambalvo

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