A project is estimated to cost $402,360 and provide annual net cash flows of $120,000 for 5 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.893 0.870 0.833 1.833 1.690 1.626 1.528 2.673 2.402 2.283 2.106 3.465 3.037 2.855 2.589 4.212 3.605 3.353 2.991 4.917 4.111 3.785 3.326 5.582 4.564 4.160 3.605 6.210 4.968 4.487 3.837 9 6.802 5.328 4.772 10 7.360 5.650 5.019 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. 1 2 3 4 5 6 7 8 12 X % 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 4.031 4.192
A project is estimated to cost $402,360 and provide annual net cash flows of $120,000 for 5 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.893 0.870 0.833 1.833 1.690 1.626 1.528 2.673 2.402 2.283 2.106 3.465 3.037 2.855 2.589 4.212 3.605 3.353 2.991 4.917 4.111 3.785 3.326 5.582 4.564 4.160 3.605 6.210 4.968 4.487 3.837 9 6.802 5.328 4.772 10 7.360 5.650 5.019 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. 1 2 3 4 5 6 7 8 12 X % 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 4.031 4.192
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Internal rate of return
A project is estimated to cost $402,360 and provide annual net cash flows of $120,000 for 5 years.
Present Value of an Annuity of $1 at Compound Interest
Year
6%
10%
12%
15%
20%
0.909
0.893
0.870
0.833
1.736
1.690
1.626
1.528
2.487 2.402 2.283
2.106
3.170
3.037
2.855
2.589
3.791
3.605
3.353
2.991
4.355
4.111
3.785
3.326
4.868)
4.564
4.160
3.605
8
5.335 4.968
4.487
3.837
9
5.759
5.328
4.772
4.031
10
6.145 5.650
5.019
4.192
Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown)
above.
1
2
3
4
5
6
7
0.943
1.833
2.673
3.465
4.212
4.917
5.582
6.210
802
7.360
12 X %
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