Question

Assume Polaris invested $ 2.12 million to expand its manufacturing capacity. Assume that these assets have a ten-year life, and that Polaris requires a 10% internal rate of return on these assets.

Required
What is the amount of annual cash flows that Polaris must earn from these projects to have a 10% internal rate of return? (Identify the ten-period, 10% factor from the present value of an annuity table, and then divide $ 2.12 million by this factor to get the annual cash flows necessary.)



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  • CreatedNovember 29, 2013
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