ce from Cengage Learning- Mozilla Firefox = false 90% Print tem of r of $79,885

Question

ce from Cengage Learning- Mozilla Firefox = false 90% Print tem of r of $79,885 and annual net cash flows of $13,000 for each of the 10 years of its useful life. Present Value of an Annuity of 1 at Compound 10% 12% 15% 20% Interest 6% 1 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 4 3.465 3.170 3.037 2.855 2.509 5 4.212 3.791 3.6053.3522.991 6 4.917 4.355 4.111 3.784 3.326 5.582 4.868 4,564 4.160 3.605 8 6.210 5.335 4.968 4.47 3.837 9 6.802 5.7595.328 4.772 4.031 10 7,360 6.145 5.650 .019 4.192 a present value factor for an annuity of1 which can bo used un determing the nternal rate of return. If reared, round your anawer to three deoma, pla

Explanation / Answer

(a) determine the present value factor for an annuity of $1 which con be used for determining internal rate of return factor for calculating internal rate of retun = Initial investment / annual cash inflows =$79,885/$13000 =6.145 factor =6.145 (b)using the factor determined in part (a) determine the internal rate of return of the proposal factor =6.145 By seeing the factor Table and scanning along the period line at 10 Yrears , a factor of 6.145 represent 10% as internal rate of return Internal rate of return =10%

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