Klinger Co. invests $10,050 in time period $3,000 per year for 5 years. zero and receives cash flows of 8 9 10 11 What is the Internal Rate of Return (IRR) for this investment? 12 Hint: Divide the investment cost by the annuity amount; 13 then look up the result in the PV Annuity table below. 0 2 1 3 14 -$10,050 $3,000 $3,000 $3,000 15 PV OF $1.00 (wrong table for this exercise! 16 17 1% 2% 3% 4% 5% 6% 7% 18 1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 19 2 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 20 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 21 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 22 5 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 23 PV OF AN ANNUITY OF $1.00 (right, 24 use this annuity table!) 25 1% 2% 3% 4% 5% 6% 7% 26 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 27 2 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8080 28 3 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 29 4 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 30 4.8534 4.7135 4.5797 4.4518 4.3295 4.2124 4.1002 31 32 4 3 $3,000 $3,000 $3,000 11% 13% 15% 7% 8% 9% 10% 12% 14% 0.9259 0.8850 0.8696 0.9346 0.9174 0.9009 0.8772 0.9091 0.8929 0.8573 0.7561 0.8734 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7938 0.7312 0.7118 0.6575 0.8163 0.7722 0.7513 0.6931 0.6750 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.7130 0.6806 0.6209 0.5935 0.4972 0.6499 0.5674 0.5428 0.5194 7% 8% 9% 10% 11% 12% 13% 14% 15% 0.9259 0.9091 0.9346 0.9174 0.9009 0.8929 0.8850 0.8772 0.8696 1.8080 1.7833 1.7591 1.7355 1.7125 1.6901 1.6681 1.6467 1.6257 2.6243 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 3.3872 3.2397 3.1699 1 3.3121 3.1024 3.0373 2.9745 2.9137 2.8550 4 4.1002 3.9927 3.8897 3.7908 3.6959 3.6048 3.5172 3.4331 3.3522