1) Ruano, Inc. is analyzing the acquisition of new equipment, which will cost $50,000. Accountants have determined that this equipment will have a five-year useful life, and in each year generate net income of $12,800 and operating cash flow of $14,200. The company requires a 10% return on investment capital.

What is the approximate IRR of this equipment acquisition?

2)

Downing Company produces a high-resolution computer monitor. The following information is available for this product:

Fixed cost per unit $50

Variable cost per unit $150

Total cost per unit $200

Downing expects to sell 10,000 units per year. The company has decided to price its monitors to earn a 14% return on its investment of $8,000,000.

What is the target selling price per monitor?