Question
The following data pertain to an investment proposal: Required equipment investment $120,200 Annual cost savings $31,700 Projected life of investment 5 years Projected salvage value
The following data pertain to an investment proposal:
Required equipment investment $120,200
Annual cost savings $31,700
Projected life of investment 5 years
Projected salvage value $0
Required rate of return 9%
The income tax rate is 30%. To which amount is the internal rate of return on this investment closest?
A. 3.8%
B. 10.0%
C. 9.0%
D. 38.1%
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College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
4th edition
978-1259995057, 1259995054, 978-0077503987, 77503988, 978-0077639730
