Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of...

 

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Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of four years with no residual value. The cash inflows are as shown below: Year 1 2 3 4 $120,000 235,000 140,000 98,000 The present value of $1: 10% 11% 0.901 0.812 0.731 1 0.909 2 0.826 3 0.751 4 0.683 0.659 0.636 5 0.621 0.593 0.567 12% 13% 0.893 0.885 0.797 0.783 0.712 0.693 .613 0.543 The IRR of the project would be 14% 0.877 0.769 0.675 0.59 0.519 Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of four years with no residual value. The cash inflows are as shown below: Year 1 2 3 4 $120,000 235,000 140,000 98,000 The present value of $1: 10% 11% 0.901 0.812 0.731 1 0.909 2 0.826 3 0.751 4 0.683 0.659 0.636 5 0.621 0.593 0.567 12% 13% 0.893 0.885 0.797 0.783 0.712 0.693 .613 0.543 The IRR of the project would be 14% 0.877 0.769 0.675 0.59 0.519

Answer rating: 100% (QA)

To calculate the Internal Rate of Return IRR of the project we need to find the discount rate at whi... View the full answer