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Windsor, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $10216 and will be depreciated straight-line over its useful life with no salvage value. Windsor requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return for this investment?

Windsor, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $10216 and will be depreciated straight-line over its useful life with no salvage value. Windsor requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return for this investment?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Windsor, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $10216 and will be depreciated straight-line over its useful life with no salvage value. Windsor requires a 10% rate of return. Period 8% Present Value of an Annuity of 1 9% 11% 12% 9% 10% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return for this investment?
Transcribed Image Text:Windsor, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $10216 and will be depreciated straight-line over its useful life with no salvage value. Windsor requires a 10% rate of return. Period 8% Present Value of an Annuity of 1 9% 11% 12% 9% 10% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return for this investment?
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