Glamour Music is considering investing $800,000 in private lesson studios that will have no residual value. The studios are expected to result in annual net cash inflows of $115,000 per year for the next ten years. Assume that Glamour Music uses an 8% hurdle rate. What is the approximate internal rate of return (IRR) of the studio investment? (Click the icon to view the present value of an annuity table) (Click the icon to view the present value table) (Click the icon to view the future value of an annuity table.) (Click the icon to view the future value table ) *** The internal rate of return (IRR) is between 6% and 8% 8% and 10% 5% and 6% 4% and 5% 20% 0.833 1.528 2.106 2.589 2.991 Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.605 1.566 Period 3 2941 2.884 2.829 2.775 2723 2.673 2.577 2.487 2.402 2.322 2 246 2.174 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3585 3.498 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 3.812 Period 8 7652 7.325 7.020 6.7336.463 6.210 5.747 5.335 4.968 4639 4.344 4.078 Period 9 8.566 8.162 7.786 7.435 7. 108 6.802 6 247 5.759 5.328 4.946 4.607 4 303 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 Period 11 10.368 9.787 9.253 8.760 8 306 7.887 7.1396.495 5.938 5.453 5.029 4.656 Period 12 11.255 10.575 9.954 | 9.385 8.863 8.3847536 6.814 6.194 5660 5.197 4.793 Period 13 12.134 11 348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.2447.367 6.628 6.002 5.468 5.008 Period 15 13.865 12.849 11.938 11.118 10 380 9.712 8.559 7.606 6.811 6.142 5.575 5.092 Period 20 18.046 16.351 14.877 13.590 12 462 11.470 9.818 8.514 7.469 6.623 5.929 5.353 Period 25 22.023 19.523 17 413 15.622 14.094 12783 10.675 9.077 7 843 6.873 6.097 5.467 Period 30 25 808 22 396 19 600 17 292 15 372 13.765 11 258 9 427 8055 7.003 6.177 5.517 Period 40 32.835 27 355 23.115 19.793 17 159 15.046 11.925 9.779 8 244 7.105 6233 5.548 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.870 4.948 4.979 4.997 2 % Present Value of $1 Periods 1% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.681 0621 0.567 0.519 0.476 0.437 0.402 Period 6 0.942 | 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.3140.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 Period 11 0.896 0.804 0.722 0 650 0.585 0.527 0.429 0.350 0.287 0.237 0.1950.162 0.135 Period 12 0887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 Period 20 0.820 0.873 0.554 0.456 0.377 0.312 0215 0.149 0.104 0.073 0.051 0.037 0.026 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 Period 30 0.742 0.5520.412 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 Period 40 0 672 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Future Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1000 1 000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2010 2020 2030 2040 2.050 2.060 2080 2 100 2.120 2.140 2.160 2 180 2.200 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 3.506 3572 3.640 4.060 4.122 4.184 4.246 4.310 4.375 4506 4.641 4.779 4.921 5.066 5.215 5.368 5.101 5.204 5.309 5.416 5.526 5.637 5867 6.105 6.353 6.610 6.877 7.154 7.442 6.152 6:308 6.468 6.633 6.802 6.975 7336 7.716 8.115 8.536 8.977 9.442 9.930 7214 7434 7862 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 12 142 12.916 8.286 8,583 8.892 9.214 9.549 9.897 10.637 11.436 12 300 13.233 14.240 15.327 16.499 9.369 9.755 10.159 10.583 11.02711.491 12.489 | 13.579 14776 16.085 17 519 19.086 20.799 10.462 10 950 11.464 12.006 12 578 13.181 14.48715.93717 549 19.337 21.321 23.521 25.959 11.567 12 16912808 13.486 14.207 14.972 16.645 18.531 20 655 23.045 25.733 28.755 32 150 12.683 13.412 14.192 15.026 15.917 16.870 18 977 21 384 24. 133 27.271 30.850 34 931 39.581 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24 523 28.029 32.089 36.786 42.219 48.497 14.947 15.97417 086 18.292 19.599 21.015 24 215 27 97532393 37 581 43 672 50.818 59 196 16.097 17 29318.599 20 02421 579 23.276 27 152 31.772 37.280 43 842 51 660 60.965 72035 22.019 24 297 26.870 29.778 33 066 36786 45.762 57 275 72.052 91:025 115 380 146 628 188.688 28 243 3203036.459 41 646 47 72754.865 73.106 98 347 133 334 181.871 249 214 342 603 471 981 34 785 40 568 47 575 56.085 66 43979.058 113.283 164 494 241 333 356.787 530 312 790.948 1.181 882 48.88660.402 75.401 95.026 120.800 154.762 259.057 442 593 767.091 1342 0252.380 757 4,163.213 7 343 858 Period 11 Period 12 Period 13 Period 14 Period 15 Period 20 Period 26 Period 30 Period 40 Future Value of $1 5% 18 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1020 1.030 1.041 1.051 2% 1020 1.040 1 061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1 159 4% 1.040 1.082 1.125 1.170 1.217 1.050 1.103 1.158 1216 1.276 Period 6 Period 7 Period 8 Period 9 Period 10 1.062 1.072 1083 1.094 1 105 1126 1.149 1 172 1.195 1.219 1.194 1.230 1.267 1 305 1344 1.265 1.316 1.369 1.423 1480 1.340 1.407 1.477 1.551 1.629 6% 8% 10% 12% 14% 16% 18% 20% 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1.200 1.124 1.166 1210 1.254 1.300 1.346 1.392 1.440 1 191 1.260 1.331 1.405 1.482 1.561 1.643 1.728 1 262 1.360 1.464 1.574 1.689 1 811 1.939 2.074 1.338 1.469 1.611 1.762 1.925 2.100 2 288 2.488 1419 1.587 1772 1974 2.195 2.436 2.700 2.986 1 504 1.714 1.949 2.211 2.502 2.826 3.185 3.583 1.594 1 851 2.144 2.476 2.853 3.278 3.759 4.300 1.689 1.999 2.358 2.773 3.252 3.803 4.435 5. 160 1791 2 159 2 594 3.106 3.707 4.411 5.234 6.192 1.898 2 332 2.853 3.479 4.226 5.117 6.176 7.430 2.012 2.518 3.138 3.896 4.818 5.936 7.288 8.916 2.133 2.720 3.452 4.363 5.492 6.886 8.599 10.699 2 261 2.937 3.797 4.887 6.261 7.988 10.147 12.839 2.397 3.172 4.177 5.474 7.138 9.266 11.974 15,407 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 4292 6.848 10.835 17.000 26.462 40.874 62.669 95 396 5 743 10.063 17 449 29.960 50.950 85.850 143 371 237.376 10 286 21.725 45 25993 051 188.884 378.721750 378 1.469.772 Period 11 Period 12 Period 13 Period 14 Period 15 1 116 1.127 1.138 1.149 1.161 1.243 1 268 1294 1.319 1.346 1.384 1.426 1.469 1513 1.558 1 539 1.601 1.665 1.732 1.801 1.710 1796 1 886 1.980 2.079 Period 20 Period 25 Period 30 Period 40 1220 1 282 1 348 1.489 1.486 1.641 1.811 2.208 1806 2094 2427 3.262 2 191 2.666 3.243 4801 2.653 3.386 4.322 7040