Question
At the internal rate of return, the present value of net cash inflows will equal the ________. A.) average operating income B.) initial cost of
At the internal rate of return, the present value of net cash inflows will equal the ________.
A.) average operating income
B.) initial cost of the investment
C.) profit from the project
D.) residual value
If an investment's internal rate of return is higher than the required rate of return, the company should __________.
A.) | be indifferent |
B.) | none of the above |
C.) | reject |
D.) | accept |
Nylan Tiles is considering an investment in new equipment costing $858,000. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to have a residual value of $62,000. The equipment is expected to generate net cash inflows of $1,002,000 in total during the five-year life. What is the accounting rate of return associated with the equipment investment? (Round your answer to two decimal places.)
A.) | 12.36% |
B.) | 8.96% |
C.) | 45.23% |
D.) | 9.34% |
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