Question
Calculate the IRR for Cuenca Company. The company's cost of capital is 16%. Round your answer to the nearest percent. Cuenca Company is considering the
Calculate the IRR for Cuenca Company. The company's cost of capital is 16%. Round your answer to the nearest percent.
Cuenca Company is considering the purchase of new equipment that will speed up the process for producing flash drives. The equipment will cost $7,200,000 and have a life of 5 years with no expected salvage value. The expected cash flows associated with the project follow:
| Year | Cash Revenues | Cash Expenses | ||
| 1 | $8,000,000 | $6,000,000 | ||
| 2 | 8,000,000 | 6,000,000 | ||
| 3 | 8,000,000 | 6,000,000 | ||
| 4 | 8,000,000 | 6,000,000 | ||
| 5 | 8,000,000 | 6,000,000 |
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Auditing Principles
Authors: Nformi Eugene Tawe
1st Edition
3330651032, 978-3330651036
