A project is estimated to cost $204,533 and provide annual net cash flows of $61,000 for five years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 1 2 3

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 4BE: Internal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of...
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A project is estimated to cost $204,533 and provide annual net cash flows of $61,000 for five years.
Present Value of an Annuity of $1 at Compound Interest
Year
6%
10%
12%
15%
20%
0.893
0.870
0.833
1.626
1.528
2.283
2.106
2.855
2.589
1
2
3
4
5
6
7
8
0.943
1.833
2.673
3.465
4.212
4.917
5.582
6.210
0.909
3.353
2.991
3.785
3.326
4.868
4.160
3.605
5.335
4.968
4.487
3.837
9
5.759
5.328
4.772
4.031
10
6.145 5.650 5.019
4.192
Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.
%
6.802
7.360
1.736
2.487
3.170
3.791
1.690
2.402
3.037
3.605
4.111
4.564
4.355
Transcribed Image Text:A project is estimated to cost $204,533 and provide annual net cash flows of $61,000 for five years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.893 0.870 0.833 1.626 1.528 2.283 2.106 2.855 2.589 1 2 3 4 5 6 7 8 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 0.909 3.353 2.991 3.785 3.326 4.868 4.160 3.605 5.335 4.968 4.487 3.837 9 5.759 5.328 4.772 4.031 10 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. % 6.802 7.360 1.736 2.487 3.170 3.791 1.690 2.402 3.037 3.605 4.111 4.564 4.355
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ISBN:
9781337912020
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Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub