A project is estimated to cost $251,272 and provide annual net cash flows of $56,000 for eight years.Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. Internal Rate of ReturnA project is estimated to cost $251,272 and provide annual net cash flows of $56,000 for eight years.Present Value of an Annuity of $1 at Compound InterestYear6%10%12%15%20%0.9430.9090.8930.8700.8331.8331.7361.6901.6261.52832.6732.4872.4022.2832.10643.4653.1703.0372.8552.5894.2123.7913.6053.3522.9914.9174.3554.1113.7843.32675.5824.8684.5644.1603.60586.2105.3354.9684.4873.83796.8025.7595.3284.7724.031107.3606.1455.6505.0194.192Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.%

Internal rate of return is a technique which define rate of return earned by a project for a period.

A project is estimated to cost $251,272 and provide annual net cash flows of $56,000 for eight years. Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.

A project is estimated to cost $251,272 and provide annual net cash flows of $56,000 for eight years. Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.

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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Question

A project is estimated to cost $251,272 and provide annual net cash flows of $56,000 for eight years.

Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.

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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