Crane Corporation is considering investing in a new facility. The estimated cost of the facility is $1,912,700. It will be used for 12 years, then sold for $710,000. The facility will generate annual cash inflows of $391,200 and will need new annual cash outflows of $159,400. The company has a required rate of return of 7%. Click here to view PV table. Calculate the internal rate of return on this project. (Round answer to 0 decimal place, e.g. 13%.) Internal rate of return is Whether the project should be accepted. The project be accepted. %
Crane Corporation is considering investing in a new facility. The estimated cost of the facility is $1,912,700. It will be used for 12 years, then sold for $710,000. The facility will generate annual cash inflows of $391,200 and will need new annual cash outflows of $159,400. The company has a required rate of return of 7%. Click here to view PV table. Calculate the internal rate of return on this project. (Round answer to 0 decimal place, e.g. 13%.) Internal rate of return is Whether the project should be accepted. The project be accepted. %
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:Crane Corporation is considering investing in a new facility. The estimated cost of the facility is $1,912,700. It will be used for 12 years,
then sold for $710,000. The facility will generate annual cash inflows of $391,200 and will need new annual cash outflows of
$159,400. The company has a required rate of return of 7%. Click here to view PV table.
Calculate the internal rate of return on this project. (Round answer to O decimal place, e.g. 13%.)
Internal rate of return is
Whether the project should be accepted.
The project
be accepted.
%
Transcribed Image Text:(n)
Periods
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
4%
1.00000
1.04000
1.08160
1.12486
1.16986
1.21665
1.26532
1.31593
1.36857
1.42331
1.48024
1.53945
1.60103
1.66507
1721co
5%
1.00000
1.05000
1.10250
1.15763
1.21551
1.27628
1.34010
1.40710
1.47746
1.55133
1.62889
1.71034
1.79586
1.88565
107002
6%
1.00000
1.06000
1.12360
1.19102
1.26248
1.33823
7%
1.00000
1.07000
1.14490
1.22504
1.31080
1.40255
2.25000
1.41852
1.50363 1.60578
1.59385
1.71819
1.68948
1.83846
1.79085
1.96715
1.89830
2.10485
2.01220 2.25219
2.13293
2.40985
8%
705₂
1.00000
1.50073 1.58687
1.71382
1.00000
1.10000
1.16640
1.18810
1.21000
1.25971 1.29503 1.33100
1.36049
1.41158
1.46410
1.46933
1.08000
1.85093
1.99900
2.15892
2.33164
2.51817
2.71962
9%
202710
1.00000
1.09000
1.53862
1.67710
1.82804
1.99256
2.17189
2.36736
2.58043
2.81267
3.06581
10%
224172
1.61051
2.85312
1.77156
1.87041
1.94872
2.07616
2.14359
2.30454
2.35795
2.55803
2.59374 2.83942
3.13843
3.45227
12%
1.00000
1.00000
1.11000
1.12000
1.23210 1.25440
1.36763
1.40493
1.51807
1.68506
270750
11%
3.15176
3.49845
3.88328
421044
1.57352
1.76234
1.97382
2.21068
2.47596
2.77308
3.10585
3.47855
3.89598
4.36349
199711
15%
1.00000
1.15000
1.32250
1.52088
1.74901
2.01136
2.31306
2.66002
3.05902
3.51788
4.04556
4.65239
5.35025
6.15279
707571
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