Pharoah, Inc. is considering purchasing equipment costing $31000 with a 7-year useful life. The equipment will provide cost savings of $6800 and will be depreciated straight-line over its useful life with no salvage value. Pharoah Inc. requires a 10% rate of return. What is the approximate internal rate of return for this investment? Period 7 O 10% O 12% O 9% O 11% 8% 5.206 9% Present Value of an Annuity of 1 5.033 10% 4.868 11% 4.712 12% 4.564 15% 4.160

Peiaroah Inc is considering purchasing equipment costing $31000 witha 7 . year useful lile. The equiparsent will provide cost savings of 56800 and will be depreciated straight-line over its useful Ife with no salvage value. Pharoah lne, reguires a 10 i rate of return. What is the approcimate internal rate of return for this investment? 10k 12x 9N: cashback. Lime period: - 10 Vears USEFUL LIER =10 Years SALUAGR UALUE (Sellingprice)$5,000,000 ANNUAL cashflow:- \$25,000 (1-5 yean) Year 5=$100,000 investment Cashflow (110)=$40,000 Annual 1) Should i invest and why Comment on discount rate? comment about Internal Rate Return