ZuoTi.Pro
Question

QUESTION 11 Present value of an Annuity of $1 in Arrears ​ Periods 4% 6% 8%...

QUESTION 11

Present value of an Annuity of $1 in Arrears

​

Periods

4%

6%

8%

10%

12%

14%

1

0.962

0.943

0.926

0.909

0.893

0.877

2

1.886

1.833

1.783

1.736

1.690

1.647

3

2.775

2.673

2.577

2.487

2.402

2.322

4

3.630

3.465

3.312

3.170

3.037

2.914

5

4.452

4.212

3.993

3.791

3.605

4.433

6

5.242

4.917

4.623

4.355

4.111

3.889

7

6.002

5.582

5.206

4.868

4.564

4.288

8

6.733

6.210

5.747

5.335

4.968

4.639

9

7.435

6.802

6.247

5.759

5.328

4.946

10

8.111

7.360

6.710

6.145

5.650

5.216

​

Ruby Company is considering a project with an initial investment of $300,000 that will yield annual net cash flows of $90,580 and will be depreciated at $75,000 per year over its 4 year life. What is the internal rate of return? (Note: Round the discount factor to three decimal places.)

​

a.

12%
b.

10%
c.

8%
d.

14%
e.

6%
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

c.8%.

IRR is the rate at which the present value of cash outflow equal present value of cash inflows.

here,

present value of cash outflows = $300,000

present value of cash inflows = $90,580 * present value of annuity factor

at IRR

$300,000 = 90,580 * present value of annuity factor

=> present value of annuity factor = 300,000 / 90,580

=>3.312.

from the table of annuity

we can see that for 4 periods, the factor 3.312 falls under 8%.

so the IRR for the given problem is 8%.

0 0
Add a comment
Know the answer?
Add Answer to:
QUESTION 11 Present value of an Annuity of $1 in Arrears ​ Periods 4% 6% 8%...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Present value of $1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909...

    Present value of $1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 0.925 0.890 0.857 0.826 0.797 0.769 3 0.889 0.840 0.794 0.751 0.712 0.675 4 0.855 0.792 0.735 0.683 0.636 0.592 5 0.822 0.747 0.681 0.621 0.567 0.519 6 0.790 0.705 0.630 0.564 0.507 0.456 7 0.760 0.665 0.583 0.513 0.452 0.400 8 0.731 0.627 0.540 0.467 0.404 0.351 9 0.703 0.592 0.500 0.424 0.361 0.308 10 0.676 0.558 0.463 0.386 0.322...

  • Present value of $1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909...

    Present value of $1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 0.925 0.890 0.857 0.826 0.797 0.769 3 0.889 0.840 0.794 0.751 0.712 0.675 4 0.855 0.792 0.735 0.683 0.636 0.592 5 0.822 0.747 0.681 0.621 0.567 0.519 6 0.790 0.705 0.630 0.564 0.507 0.456 7 0.760 0.665 0.583 0.513 0.452 0.400 8 0.731 0.627 0.540 0.467 0.404 0.351 9 0.703 0.592 0.500 0.424 0.361 0.308 10 0.676 0.558 0.463 0.386 0.322...

  • The reason that a discount factor in Year 3 is less than a discount factor in...

    The reason that a discount factor in Year 3 is less than a discount factor in Year 2 is that Question 34 options: Kenner Company is considering two projects. ​ ​ Project A Project B Initial investment $85,000 $24,000 Annual cash flows $20,676 $  6,011 Life of the project 6 years 5 years Depreciation per year $14,167 $  4,800 ​ Present value of an Annuity of $1 in Arrears ​ Periods 8% 10% 12% 14% 1 0.926 0.909 0.893 0.877 2 1.783...

  • Options are: 10% 12% 8% 6% Please help me out Reece Corporation is considering the purchase...

    Options are: 10% 12% 8% 6% Please help me out Reece Corporation is considering the purchase of a machine that would cost $24,388 and would have a useful life of 6 years. The machine would generate S5,600 of net annual cash inflows per year for each of the 6 years of its life. Using the information below, the internal rate of return on the machine would be closest to which of the following? Present Value of $1 10% 0.683 0.621...

  • Question 1. A. B. Future Value of $1 Periods 4% 1.040 1.082 5% 6% 7% 8%...

    Question 1. A. B. Future Value of $1 Periods 4% 1.040 1.082 5% 6% 7% 8% 9% 10% 12% 14% 16% 1.060 1.124 1.070 1.140 1,300 1 1.050 1.103 1.158 1.080 1.090 1.100 1.210 1.120 1.254 1.160 2 1.145 1.166 1.188 1.346 1.191 1.405 3 1.125 1.170 1.225 1.311 1,403 1.260 1,295 1.331 1.464 1,482 1.561 1.811 2.100 1.689 1.925 4 1.216 1.262 1.360 1.412 1.574 1.338 1,539 5 1.217 1.276 1.469 1,611 1.762 1.772 1.949 1.265 1.316 2.195 2.502...

  • Calculate the present value of the following​ amounts: 1. ​$14 comma 00014,000 at the end of...

    Calculate the present value of the following​ amounts: 1. ​$14 comma 00014,000 at the end of tenten years at 88​% 2. ​$14 comma 00014,000 a year at the end of the next tenten years at 88​% ​(If using present value​ tables, use factor amounts rounded to three decimal​ places, X.XXX. Round your final answers to the nearest whole​ dollar.) LOADING... ​(Click the icon to view Present Value of​ $1 table.) LOADING... ​(Click the icon to view Present Value of Ordinary...

  • Annual cash flows from two competing investment opportunities are given. Each investment opportunity will require the...

    Annual cash flows from two competing investment opportunities are given. Each investment opportunity will require the same initial investment. LOADING...​(Click the icon to view the competing investment​ opportunities.) LOADING...​(Click the icon to view the Present Value of​ $1 table.) LOADING...​(Click the icon to view the Present Value of Annuity of​ $1 table.) Requirement 1. Assuming a 14​% interest​ rate, which investment opportunity would you​ choose? Begin by computing the present value of each investment opportunity. ​(Assume that the annual cash...

  • On January 1, 2007, Phillips, Inc. leased a new machine from U.S. Leasing. The specific information...

    On January 1, 2007, Phillips, Inc. leased a new machine from U.S. Leasing. The specific information on the lease is as follows: Lease inception Annual rental payment at December 31 of each year Economic life of the machine Market value of the machine Interest rate used by Phillips, Inc. End of 7 - year lease term January 1, 2007 $ 51,352 8 years $ 275,000 10% December 31, 2013 On January 1, 2007, Phillips, Inc. should record a lease liability...

  • S12-7 (similar to) Question Help Assume you make the following investments: You invest a lump sum...

    S12-7 (similar to) Question Help Assume you make the following investments: You invest a lump sum of $8,550 for three years at 12% interest. What is the investment's value at the end of three years? а. In a different account earning 12% interest, you invest $2,850 at the end of each year for three years. What is the investment's value at the end of three years? b. What general rule of thumb explains the difference in the investments' future values?...

  • Assume you make the following investments: You invest a lump sum of $7,550 for four years...

    Assume you make the following investments: You invest a lump sum of $7,550 for four years at 14% interest. What is the investment's value at the end of four years? b. In a different account earning 14% interest, you invest $1,888 at the end of each year for four years. What is the investment's value at the end of four years? What general rule of thumb explains the difference in the investments' future values? (Click the icon to view the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT