Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Intemal Rate of Return Method The internal rate of return method is used by Testerman Construction Co, in analyzing a capital expenditure proposal that involves
Intemal Rate of Return Method The internal rate of return method is used by Testerman Construction Co, in analyzing a capital expenditure proposal that involves an investment of $85,323 and annual net cash flows of $17.000 for each of the 10 years of its useful life. Present Value of an Annuity of 81 at Compound Interest Year 6% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 1.833 1.736 1.690 1.626 1.528 10% 2.673 2.487 2.402 2.283 2.106 3.037 2.855 2.589 Woow N- 3.465 4.212 3.170 3.791 3.605 3.353 4.355 4.111 3.785 2.991 3.326 3.605 4.868 4.564 4.160 4.917 5.582 6.210 6.802 7.360 3.837 5.335 5.759 6.145 4.968 4.487 5.328 4.772 5.6505.019 4.031 4192 a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of retum. If required, round your answer to three decimal places. b. Using the factor determined in part) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started