Crane, Inc. is considering purchasing equipment costing $20000 with a 7-year useful life. The equipment will provide cost savings of $4200 and will be depreciated straight-line over its useful life with no salvage value. Crane Inc. requires a 8% rate of return. What is the approximate internal rate of return for this investment? Period 7 6% 5.582 Present Value of an Annuity of 1 8% 9% 5.206 5.033 7% 5.389 10% 4.868 13% 4.423

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Crane, Inc. is considering purchasing equipment costing $20000 with a 7-year useful life. The equipment will provide cost savings of
$4200 and will be depreciated straight-line over its useful life with no salvage value. Crane Inc. requires a 8% rate of return. What is
the approximate internal rate of return for this investment?
Period
7
6%
5.582
Present Value of an Annuity of 1
8%
9%
5.206
5.033
7%
5.389
10%
4.868
13%
4.423
Transcribed Image Text:Crane, Inc. is considering purchasing equipment costing $20000 with a 7-year useful life. The equipment will provide cost savings of $4200 and will be depreciated straight-line over its useful life with no salvage value. Crane Inc. requires a 8% rate of return. What is the approximate internal rate of return for this investment? Period 7 6% 5.582 Present Value of an Annuity of 1 8% 9% 5.206 5.033 7% 5.389 10% 4.868 13% 4.423
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