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es Problem 12-13 (Algo) Internal rate of return [LO12-4] Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $34,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 17,000 15,000 10,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % b. With a cost of capital of 14 percent, should the equipment be purchased? No Yes

es Problem 12-13 (Algo) Internal rate of return [LO12-4] Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $34,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 17,000 15,000 10,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % b. With a cost of capital of 14 percent, should the equipment be purchased? No Yes

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 26BEB
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es Problem 12-13 (Algo) Internal rate of return [LO12-4] Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $34,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 17,000 15,000 10,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % b. With a cost of capital of 14 percent, should the equipment be purchased? No Yes
Transcribed Image Text:es Problem 12-13 (Algo) Internal rate of return [LO12-4] Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $34,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 17,000 15,000 10,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % b. With a cost of capital of 14 percent, should the equipment be purchased? No Yes
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