Internal rate of return method The internal rate of return method is used by Royston Construction...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Internal rate of return method The internal rate of return method is used by Royston Construction Co. in analyzing a capital expenditure proposal that involves an investment of $28,530 and annual net cash flows of $9,000 for each of the 4 years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 10 7.360 6.145 5.650 5.019 4.031 4.192 a. Determine a present value factor for an annuity of $1, which can be used in determining the internal rate of return. If required, round your answer to three decimal places. 3.170 b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal. 31.7 X % Internal rate of return method The internal rate of return method is used by Royston Construction Co. in analyzing a capital expenditure proposal that involves an investment of $28,530 and annual net cash flows of $9,000 for each of the 4 years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 10 7.360 6.145 5.650 5.019 4.031 4.192 a. Determine a present value factor for an annuity of $1, which can be used in determining the internal rate of return. If required, round your answer to three decimal places. 3.170 b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal. 31.7 X %
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
On their first meeting, Katie asks Moe to guess the day and month of her birth. 1. What is the probability that Moe will guess correctly for a non-leap year birthday? 2. Would it be unlikely for him...
-
User You Original Post For this discussion, first you will define a population of people or things that are of interest to you. Next you will define two quantitative variables that could be observed...
-
Using research and drawing upon personal experience in learning basic skills, share how to teach limit-setting and which model of limit-setting to use. How to introduce and explain the importance of...
-
Plot the six risks on a probability/impact matrix using the project impact matrix 2023 template. Write one to two sentences stating the rationale for how you determined the quadrant placement for...
-
What is the purpose of the post-closing trial balance? Explain where the information for the post-closing trial balance comes from.
-
The registration numbers of candidates appearing for an examination have four letters followed by three digits. Assuming that any letter or digit can be used, how many different registration numbers...
-
A difference between the accounting for tax purposes and the accounting for financial reporting purposes. This type of difference affects both book and tax calculations but not in the same time...
-
Adcock Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,900 units of Product B was received. The standard cost of one unit of Product...
-
Evaluate the following integral in cylindrical coordinates. 6 36-x 5 1 dz dy dx 1+X 2 -6 0 D 6 3 4 36-x 1 dz dy dx = - 6 0 1+ x-+ y (Type an exact answer, using x as needed.)\fEvaluate the following...
-
Do Calgary Police Services communicate the investigation results to the public through oversight and governance? and if so, how? Could you please explain
-
1.Describe weighted average cost of capital (WACC) and why it is used in capital budgeting. 2. Describe the capital components used to determine the WACC for a firm.
-
1 For the series , it is clear that 2n 1 = 0. Can we use this fact to lim n 2n conclude that the series is convergent? Why or why not?
-
The following year-end data were taken from recent balance sheets of Under Armour, Inc. (UA) (in millions): December 31 December 31 Current assets Current liabilities Year 2 Year 1 a. Compute the...
-
Provide 5 examples foreach type of overhead in the rubber glove manufacturing company. production overhead Administrative overhead, Selling overhead Distribution overhead Explain and identify the...
-
1.[3] Find the length of the curve, y = t 1 dt, 1 x 16 x4 2.[6] Consider the curve given by y = x+12 16 2x2, 1 x 2 (a) Find the length of this curve (b) Find the surface area is this curve is rotated...
-
Eleven high school teachers were asked to give the numbers of students in their classes. The sample data follows: 36, 31, 30, 31, 20, 19, 24, 34, 21, 28, 24. Find the five-number summary.
-
(a) Bright Sdn Bhd (BSB) is a tax resident manufacturing company in Johor, which involves in ceramic tiles. Currently, BSBs annual sales turnover has been forecasted to be around RM 300,000 for the...
-
(Efficient frontier) This question relates to the data in the previous question. Calculate and graph the efficient frontier of the stock portfolios composed of stocks X and Y.
-
(Minimum variance portfolio) What will be the weights, the expected return, the variance, and the standard deviation of the minimum variance portfolio combining the stocks below? A B C 234567 X Y 3...
-
(Efficient frontier) This question relates to the data in the previous question. Calculate and graph the efficient frontier of the stock portfolios composed of stocks X and Y. A B C 1 RETURN...
Study smarter with the SolutionInn App