The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $46,602 and annual net cash flows of $18,000 for each of the four years of its useful life.
The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $46,602 and annual net cash flows of $18,000 for each of the four years of its useful life.
The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $46,602 and annual net cash flows of $18,000 for each of the four years of its useful life.
The internal rate of return method is used by Testerman Construction Co.
Transcribed Image Text:The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an
investment of $46,602 and annual net cash flows of $18,000 for each of the four years of its useful life.
Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.
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