WScreenshot (126).pngChapter 26Present Value of an Annuity of $1 at Compound InterestYear6%10%12%15%20%12341 64°FInternal rate of return methodThe internal rate of return method is used by Royston Construction Co. in analyzing a capital expenditure proposal that involves an investment of $17,946 and annual net cash flows of $6,000 foreach of the 5 years of its useful life.56789100.94365°FWindyeBook0.9091.7362.4873.1703.7914.3550.8931.6902.4023.0373.6054.111 3.7854.868 4.564 4.1604.9684.4874.7725.0195.3285.6501.8332.6733.4654.2124.9175.5825.3356.2106.8025.7596.1457.360a. Determine a present value factor for an annuity of $1, which can be used in determining the internal rate of return. If required, round your answer to three decimal places.0.8701.6262.2832.855▬▬▬■3.3530.8331.5282.106Q Search22.589b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal.%3 1Print Item2.9913.3263.6053.8374.0314.192ZOQ5454a✪ 110%WCO4) OA da2:24 PM€11/19/2023

Present value factor for an annuity of $1 = Investment / Annual net cash flow

The internal rate of return method is used by Royston Construction Co. in analyzing a capital expenditure proposal that involves an investment of $17,946 and annual net cash flows of $6,000 for each of the 5 years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 4.917 4.355 4.111 3.785 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.031 7.360 6.145 5.650 4.192 a. Determine a present value factor for an annuity of $1, which can be used in determining the internal rate of return. If required, round your answer to three decimal places. 4 5 6 7 8 9 10 4.772 5.019 b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal. %

The internal rate of return method is used by Royston Construction Co. in analyzing a capital expenditure proposal that involves an investment of $17,946 and annual net cash flows of $6,000 for each of the 5 years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 4.917 4.355 4.111 3.785 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.031 7.360 6.145 5.650 4.192 a. Determine a present value factor for an annuity of $1, which can be used in determining the internal rate of return. If required, round your answer to three decimal places. 4 5 6 7 8 9 10 4.772 5.019 b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal. %

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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