Payback Period, IRR, and Minimum Cash Flows

The management of Mesquite Limited is currently evaluating the following investment proposal:

Time $0$ Year $1$ Year $2$ Year $3$ Year $4$

Initial investment $ $250,000--------$

Net operating

cash inflows $--$ $ $100,000$ $ $100,000$ $ $100,000$ $ $100,000$

$($a$)$ Determine the proposal's payback period.

Answer

years

$($b$)$ Determine the proposal's internal rate of return. $($Refer to Appendix $12$B if you use the table approach.$)$

Answer

$\%$

$($c$)$ Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of $16$ percent. Round the answer to the nearest dollar.

$Answer