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 Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.
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