Glossimer Thread Company is evaluating an investment that will cost $720,000 and will yield cash inflows of $230,000 in the first year, $325,000 in the second year, and $360,000 in the third and the final year. Use the table below and determine the internal rate of return. Present value of $1: 8% 9% 10% 11% 12% 1 0.926 2 0.857 3 0.794 4 0.735 5 0.681 0.917 0.909 0.901 0.893 0.842 0.826 0.812 0.797 0.772 0.731 0.712 0.659 0.593 0.636 0.708 0.650 0.683 0.621 0.567 The IRR of the project will be O A. less than 11%, more than 10% O B. between 11% and 12% OC. more than 12% O D. less than 10%
Glossimer Thread Company is evaluating an investment that will cost $720,000 and will yield cash inflows of $230,000 in the first year, $325,000 in the second year, and $360,000 in the third and the final year. Use the table below and determine the internal rate of return. Present value of $1: 8% 9% 10% 11% 12% 1 0.926 2 0.857 3 0.794 4 0.735 5 0.681 0.917 0.909 0.901 0.893 0.842 0.826 0.812 0.797 0.772 0.731 0.712 0.659 0.593 0.636 0.708 0.650 0.683 0.621 0.567 The IRR of the project will be O A. less than 11%, more than 10% O B. between 11% and 12% OC. more than 12% O D. less than 10%
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
Related questions
Question
33
Transcribed Image Text:Glossimer Thread Company is evaluating an investment that will cost $720,000 and will yield cash inflows of $230,000 in the first year, $325,000 in the second year, and $360,000 in the third and the final year. Use the table below and determine
the internal rate of return.
Present value of $1:
8%
9%
10%
11%
12%
1 0.926
0.917
0.909
0.901
0.893
2
0.857
0.842
0.826
0.812
0.797
3
0.794
0.772
0.751
0.731
0.712
4
0.735
0.708
0.683
0.659
0.636
5
0.681
0.650
0.621
0.593
0.567
The IRR of the project will be
O A. less than 11%, more than 10%
O B. between 11% and 12%
OC. more than 12%
O D. less than 10%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education