Tobert Inc. is considering the purchase of a new piece of equipment. The cost of the equipment would be $53,632 and the company expects the equipment would generate annual cash flows of $16,000 for the next five years. The company's hurdle rate is 12%. Compute the internal rate of return (IRR) on this investment. [Enter your answer in the form of a decimal, not a percentage].
Tobert Inc. is considering the purchase of a new piece of equipment. The cost of the equipment would be $53,632 and the company expects the equipment would generate annual cash flows of $16,000 for the next five years. The company's hurdle rate is 12%. Compute the internal rate of return (IRR) on this investment. [Enter your answer in the form of a decimal, not a percentage].
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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![Tobert Inc. is considering the purchase of a new
piece of equipment. The cost of the equipment
would be $53,632 and the company expects the
equipment would generate annual cash flows of
$16,000 for the next five years. The company's
hurdle rate is 12%. Compute the internal rate of
return (IRR) on this investment.
[Enter your answer in the form of a decimal, not a
percentage].](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52556be2-a679-4d61-81fd-93481e8bad73%2Fa6b64f1e-6775-4837-8a6e-a49ae20ba566%2Fn4ojogd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Tobert Inc. is considering the purchase of a new
piece of equipment. The cost of the equipment
would be $53,632 and the company expects the
equipment would generate annual cash flows of
$16,000 for the next five years. The company's
hurdle rate is 12%. Compute the internal rate of
return (IRR) on this investment.
[Enter your answer in the form of a decimal, not a
percentage].
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