John's Arcade is planning on purchasing a virtual reality simulator for ($ 210,000). The simulator's estimated service
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John's Arcade is planning on purchasing a virtual reality simulator for \(\$ 210,000\). The simulator's estimated service life is seven years with a residual value of \(\$ 25,000\). The simulator is expected to bring in \(\$ 40,000\) per year after expenses. Compute the internal rate of return on the simulator. If John wanted to get a \(13 \%\) internal rate of return, what would the annual cash flows need to be in order generate this rate of return?
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Managerial Accounting Information For Decisions
ISBN: 9780324222432
4th Edition
Authors: Thomas L. Albright , Robert W. Ingram, John S. Hill
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