Question
The management of O'Malley Enterprises is currently evaluating the following investment proposal: Time 0 Year 1 Year 2 Year 3 Year 4 Initial investment $300,000
The management of O'Malley Enterprises is currently evaluating the following investment proposal:
| Time 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
|---|---|---|---|---|---|
| Initial investment | $300,000 | ||||
| Net operating cash flows | $100,000 | $100,000 | $100,000 | $100,000 |
| Present Value of an Annuity of $1 | ||||||
|---|---|---|---|---|---|---|
| Period | 8% | 10% | 12% | 14% | 16% | 18% |
| 1 | 0.82593 | 0.90909 | 0.89286 | 0.87719 | 0.86207 | 0.84746 |
| 2 | 1.78326 | 1.73554 | 1.69005 | 1.64666 | 1.60523 | 1.56564 |
| 3 | 2.57710 | 2.48685 | 2.40183 | 2.32163 | 2.24589 | 2.17427 |
| 4 | 3.31213 | 3.16987 | 3.03735 | 2.91371 | 2.79818 | 2.69006 |
Given the amount of the initial investment, what isthe minimum annual net cash inflows required to obtain an internal rate of return of 16 percent. (Round the answer to the nearest dollar.)
Select one:
a. $100,000
b. $300,000
c. $133,577
d. $107,213
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International Marketing And Export Management
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
8th Edition
1292016922, 978-1292016924
