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
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 19E
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