Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company has a project with a 5-year life, requiring an initial investment of $231,600, and is expected to yield annual cash flows of $58,000.

A company has a project with a 5-year life, requiring an initial investment of $231,600, and is expected to yield annual cash flows of $58,000. What is the internal rate of return? IRR Factora Investment Annual cash flows IRR Factor: This is the factor which "Investment: This is the present you'll use on the table for the present value of an annuity of $1 percentage which corresponds to dollar in order to find the the internal rate of return. value of cash outflows associated with a project. If all of the investment is up front at the beginning of the project, the present value factor is 1.000. "Annual Cash Flows: This is the amount of cash flows to be received annually as a result of the project. Calculation Steps Present Value of an Annuity of $1 at Compound Interest. IRR Factor = rounded to 6 decimals The calculated factor corresponds to which percentage in the present value of ordinary annuity table? %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Mcgrawhil/Irwin

1st Edition

B008CMOMTS

More Books

Students also viewed these Accounting questions

Question

7. How might you go about testing these assumptions?

Answered: 1 week ago