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Stoney Acres buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of
Stoney Acres buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of $18,550 per year and will have no salvage value at the end of its life. The income tax rate is 30%. Straight-line depreciation is used. How much is the internal rate of return?
A) 3.3% B) 30.2% C) 8.0% D) 5.68%
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