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What is the investments internal rate of return (rounded to the nearest percent)? Please see attached document for problem! Westmont Publishing is considering the purchase
What is the investments internal rate of return (rounded to the nearest percent)?
Please see attached document for problem!
Westmont Publishing is considering the purchase of a used printing press costing $75,200. The printing press would generate a net cash inflow of $31,310 a year for 3 years. At the end of 3 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straightline depreciation. The present value factors of an annuity of $1.00 for different rates of return are as follows: Period 2 3 4 8% 1.78326 2.57710 3.31213 Cost of Capital 10% 12% 14% 1.73554 1.69005 1.64666 2.48685 2.40183 2.32163 3.16987 3.03735 2.91371 The investments internal rate of return (rounded to the nearest percent) is: 16% 1.60523 2.24589 2.79818Step by Step Solution
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