IRR = Present value of cash inflow = present value of cash outflow
8270X = 34000
X = 34000/8270 = 4.111
IRR = 12%
So answer is d) 12%
Marigold, Inc. is considering purchasing equipment costing $34000 with a 6-year useful life. The equipment will...
Splish Brothers, Inc. is considering purchasing equipment costing $76000 with a 6-year useful life. The equipment will provide annual cost savings of $18487 and will be depreciated straight-line over its useful life with no salvage value. Splish Brothers requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return for this investment? 9% 10% 11% 12%
--/10 Question 9 View Policies Current Attempt in Progress Sheridan, Inc. is considering purchasing equipment costing $40000 with a 6-year useful life. The equipment will provide annual cost savings of $9730 and will be depreciated straight-line over its useful life with no salvage value. Sheridan requires a 10% rate of return. Period 6 Present Value of an Annuity of 1 8% 9% 10% 11% 12% 15% 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return...
Cullumber, Inc. is considering purchasing equipment costing $30000 with a 6-year useful life. The equipment will provide annual cost savings of $7200 and will be depreciated straight-line over its useful life with no salvage value. Cullumber requires a 10% rate of return. Present Value of an Annuity of 1 What is the approximate internal rate of return for this investment? 12% 9% 10% 11%
Johnson Company is considering purchasing one of two new machines. The following estimates are available for each machine: Machine 1 Machine 2 Initial cost $152,000 $169,000 Annual cash inflows 50,000 60,000 Annual cash outflows 15,000 20,000 Estimated useful life 6 years 6 years The company's minimum required rate of return is 9%. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 Requirement: Compute Payback, NPV, PI, and IRR...
Multiple Choice Question 114
CullumberCompany is considering two capital investment
proposals. Estimates regarding each project are provided
below:
Project Soup
Project Nuts
Initial investment
$200000
$400000
Annual net income
16000
46000
Net annual cash inflow
60000
97000
Estimated useful life
5 years
6 years
Salvage value
0
0
The company requires a 10% rate of return on all new
investments.
Present Value of an
Annuity of 1
Periods
9%
10%
11%
12%
5
3.89
3.791
3.696
3.605
6
4.486
4.355...
Skysong Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400,000 $600,000 Annual net income $18,000 34,000 Net annual cash inflow $96,000 119,000 Estimated useful life 5 years 6 years Salvage 0 0 The company requires a 10% rate of return on all new investments Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 ...
MarigoldCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $305000 $504000 Annual net income 30000 46000 Net annual cash inflow 110000 146000 Estimated useful life 5 years 6 years Salvage value 0 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The cash...
ildhorseCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $340000 $420000 Annual net income 30000 46000 Net annual cash inflow 110000 146000 Estimated useful life 5 years 6 years Salvage value 0 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The net...
Whispering WindsCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $430000 $588000 Annual net income 30000 46000 Net annual cash inflow 110000 146000 Estimated useful life 5 years 6 years Salvage value 0 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The...
MetlockCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $320000 $576000 Annual net income 30000 46000 Net annual cash inflow 110000 146000 Estimated useful life 5 years 6 years Salvage value 0 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The cash...