(Disregard income taxes in this problem.) Compute the following:
a. An investment of $10,000 has an investment/inflow ratio of 6.2 and a useful life of 12 years. What are the annual cash inflow and internal rate of return?
b. The internal rate of return for an investment expected to yield an annual cash inflow of $2,000 is 14 percent. How much is the investment if the investment/inflow ratio is 6.14?
c. What is the maximum investment a company would make in an asset expected to produce annual cash inflow of $5,000 a year for seven years if its required rate of return is 16 percent?
d. How much investment per dollar of expected annual operating savings can a company afford if the investment has an expected life of eight years and its required rate of return is 14 percent?