Skyline Music is considering investing $775,000 in private lesson studios that will have no residual value. The studios are expected to result in annual net cash inflows of $110,000 per year for the next ten years. Assume that Skyline 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 table.) (Click the icon to view the future value of an annuity table.) The internal rate of return (IRR) is between 4% and 5% 8% and 10% 5% and 6% 6% and 8% X Reference Reference Future Value of Annuity of $1 Present Value of Annuity of $1 5% 3% Periods 1% 2% 3% 14% Periods 1% 5% 6% 4% 6% 8% 10% 12% 16% 18% 20% 2% 4% 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 0.990 0.980 0.926 0.833 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1 0.971 0.962 0.952 0.943 0.909 0.893 0.877 0.862 0.847 2.180 2.100 2.120 1.913 1.859 1.783 1.736 1.690 1.528 2 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.140 2.160 2.200 2 1.970 1.942 1.886 1.833 1.647 1.605 1.566 2.775 3.246 2.941 3.030 3.060 3.091 3.122 3.440 3.506 3.572 2.723 2.577 2.402 2.174 2.106 3 3.153 3.184 3.310 3.374 3.640 3 2.884 2.829 2.673 2.487 2.322 2.246 4.122 4.310 4.375 5.066 3.312 4.060 4.184 4.246 4.506 4.641 4.779 4.921 5.215 5.368 3.902 3.808 3.717 3.630 3.546 3.465 3.170 3.037 2.914 2.798 2.690 2.589 5.101 6.353 7.442 5.309 5.416 5.526 6.610 6.877 7.154 4.713 4.212 3.791 3.127 5 5.204 5.637 5.867 6.105 4.853 4.580 4.452 4.329 3.993 3.605 3.433 3.274 2.991 6.468 6.975 7.716 5.795 5.242 4.355 4.111 3.685 6.152 6.308 6.633 6.802 7.336 8.115 8.536 8.977 9.442 9.930 6 5.601 5.417 5.076 4.917 4.623 3.889 3.498 3.326 8.923 9.487 10.730 12.142 6.230 5.786 5.582 7 7.214 7.434 7.662 7.898 8.142 8.394 10.089 11.414 12.916 7 6.728 6.472 6.002 5.206 4.868 4.564 4.288 4.039 3.812 3.605 9.549 15.327 8.286 9.897 12.300 13.233 14.240 .5 8.892 10.63 11.436 16.499 8 52 7.325 7.020 6.733 6.463 6.210 33 .968 4.639 4.344 4.078 3.837 20.799 8.162 7.108 6.802 5.328 4.946 9 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 17.519 19.086 9 8.566 7.786 7.435 6.247 5.759 4.607 4.303 4.031 10.950 12.578 21.321 23.521 7.722 5.216 10 10.462 11.464 12.006 13.181 14.487 15.937 17.549 19.337 25.959 10 9.471 8.983 8.530 8.111 7.360 6.710 6.145 5.650 4.833 4.494 4.192 12.169 14.207 28.755 10.368 7.887 7.139 6.495 5.938 11 11.567 12.808 13.486 14.972 16.645 18.531 20.655 23.045 25.733 32.150 11 9.787 9.253 8.760 8.306 5.453 5.029 4.656 4.327 11.255 10.575 12.134 11.348 10.635 5.197 5.660 15.026 9.385 7.536 12 12.683 13.412 14.192 15.917 16.870 18.977 21.384 24.133 27.271 30.850 34.931 39.581 12 9.954 8.863 8.384 6.814 6.194 4.793 4.439 8.853 5.342 4.910 4.533 13 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 13 9.986 9.394 7.904 7.103 6.424 5.842 10.563 9.899 13.865 12.849 11.938 11.118 10.380 17.086 27.975 6.002 14.947 18.292 32.393 59.196 5.008 4.611 14 15.974 19.599 21.015 24.215 37.581 43.672 50.818 14 13.004 12.106 11.296 9.295 8.244 7.367 6.628 5.468 9.712 16.097 17.293 18.599 23.276 27.152 31.772 37.280 43.842 51.660 6.811 4.675 15 20.024 21.579 60.965 72.035 15 8.559 7.606 6.142 5.575 5.092 18.046 16.351 14.877 13.590 12.462 29.778 33.066 36.786 57.275 72.052 91.025 115.380 186.688 8.514 4.870 20 22.019 24.297 26.870 45.762 146.628 20 11.470 9.818 7.469 6.623 5.929 5.353 5.467 32.030 47.727 181.871 6.097 25 28.243 36.459 41.646 54.865 73.106 98.347 133.334 249.214 342.603 471.981 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 4.948 25.808 22.396 19.600 17.292 15.372 13.765 32.835 27.355 23.115 19.793 17.159 15.046 1,181.882 4,163.213 7,343.858 5.517 30 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 356.787 530.312 790.948 30 11.258 9.427 8.055 7.003 6.177 4.979 1,342.025 2,360.757 48.886 60.402 120.800 259.057 4.997 40 75.401 95.026 154.762 442.593 767.091 40 11.925 9.779 8.244 7.105 6.233 5.548 X Reference 1 Reference Future Value of $1 Present Value of $1 5% Periods 8% 1% 2% 3% 4% 6% 10% 12% 14% 16% 18% 20% Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 1.010 1.030 1.040 1.050 1.060 1.080 1.120 1.140 1.180 1.200 1 1.020 1.100 1.160 0.990 1 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 1.040 1.124 1.166 1.346 1.392 2 1.020 1.061 1.082 1.103 1.210 1.254 1.300 1.440 0.961 2 0.980 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 1.030 1.093 1.125 1.191 1.331 1.405 1.482 1.561 1.643 3 1.061 1.158 1.260 1.728 0.971 0.889 0.864 0.840 0.794 0.712 0.641 3 0.942 0.915 0.751 0.675 0.609 0.579 1.041 1.082 1.126 1.170 1.360 1.574 1.689 1.811 4 1.216 1.262 1.464 1.939 2.074 0.683 0.516 4 0.961 0.924 0.888 0.855 0.823 0.792 0.735 0.636 0.592 0.552 0.482 2.100 2.288 5 1.051 1.104 1.159 1.217 1.276 1.338 1.469 1.611 1.762 1.925 2.488 0.906 0.863 0.476 0.951 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.437 0.402 1.419 2.436 2.700 6 1.062 1.126 1.194 1.265 1.340 1.587 1.772 1.974 2.195 2.986 0.746 0.456 0.410 0.370 0.942 0.888 0.837 0.790 0.705 0.630 0.564 0.507 0.335 1.230 1.316 1.407 2.502 3.185 1.072 1.149 1.504 1.714 1.949 2.211 2.826 3.583 0.871 0.665 0.452 0.279 7 0.933 0.813 0.760 0.711 0.583 0.513 0.400 0.354 0.314 1.594 3.278 4.300 1.083 1.172 1.267 1.369 1.477 1.851 2.144 2.476 2.853 3.759 0.540 0.351 0.853 0.789 0.233 8 0.923 0.731 0.677 0.627 0.467 0.404 0.305 0.266 1.423 1.689 2.773 3.106 3.803 4.435 1.305 3.252 5.160 1.094 1.195 1.551 1.999 2.358 0.837 0.703 0.592 0.194 0.914 0.766 0.645 0.500 0.424 0.361 0.308 0.263 0.225 1.105 1.219 1.344 1.629 1.791 2.159 4.411 5.234 10 1.480 2.594 3.707 6.192 0.191 0.820 0.744 0.322 10 0.905 0.676 0.614 0.558 0.463 0.386 0.270 0.227 0.162 1.539 1.710 1.898 2.332 4.226 5.117 11 1.116 1.243 1.384 2.853 3.479 6.176 7.430 0.804 0.722 0.135 11 0.896 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 8.916 3.138 7.288 12 1.127 1.268 1.426 1.601 1.796 2.012 2.518 3.896 4.818 5.936 0.257 0.112 12 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.208 0.168 0.137 1.886 3.452 13 1.138 1.294 1.469 1.665 2.133 2.720 4.363 5.492 6.886 8.599 10.699 0.773 0.116 13 0.879 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.093 1.732 1.980 3.797 10.147 14 1.149 1.319 1.513 2.261 2.937 4.887 6.261 7.988 12.839 0.870 0.758 0.661 0.442 0.340 0.205 14 0.577 0.505 0.263 0.160 0.125 0.099 0.078 1.346 1.558 2.079 4.177 5.474 7.138 9.266 15 1.161 1.801 2.397 3.172 11.974 15.407 0.183 0.239 0.140 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.108 0.084 0.065 38.338 19.461 1.806 3.207 6.727 9.646 13.743 27.393 20 1.220 1.486 2.191 2.653 4.661 0.104 0.456 20 0.820 0.673 0.554 0.377 0.312 0.215 0.149 0.073 0.051 0.037 0.026 1.282 1.641 2.666 3.386 4.292 17.000 40.874 25 2.094 6.848 10.835 26.462 62.669 95.396 0.780 0.610 0.478 0.146 0.016 0.010 25 0.375 0.295 0.233 0.092 0.059 0.038 0.024 4.322 5.743 50.950 30 1.348 1.811 2.427 3.243 10.063 17.449 29.960 85.850 143.371 237.376 0.742 0.412 0.231 0.174 0.020 30 0.552 0.308 0.099 0.057 0.033 0.012 0.007 0.004 10.286 1.489 2.208 3.262 7.040 1,469.772 40 4.801 21.725 45.259 93.051 188.884 378.721 750.378 0.307 0.046 0.672 0.453 0.208 0.001 40 0.142 0.097 0.022 0.011 0.005 0.003 0.001 X 96 LC