Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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) fro the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 6%. Should the company invest in this project on the basis of internal rate of return?

Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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) fro the tables provided. Round your present value factor to 4 decimals.) (b) The hurdle rate is 6%. Should the company invest in this project on the basis of internal rate of return?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Perez company is considering an investment of $30,485 that provides net cash of $9,000 annually for four years.

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Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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 6%. Should the company invest in this project on the basis of internal rate of return?
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Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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 6%. Should the company invest in this project on the basis of internal rate of return?
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