Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for fo (a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appr the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return? Complete this question by entering your answers in the tabs below.
Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for fo (a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appr the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return? Complete this question by entering your answers in the tabs below.
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:QS 24-23 (Algo) Internal rate of return LO P4
Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for four years.
(a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the tables provided. Round your present value factor to 4 decimals.)
(b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return?
Complete this question by entering your answers in the tabs below.
Required A
Required B
What is the internal rate of return of this investment?
Present value factor
Internal rate of return
%
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