Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 31

Assume Apple invested $2.12 billion to expand its manufacturing capacity. Assume that these assets have a 10-year life, and that Apple requires a 10% internal rate of return on these assets.
Required
1. What is the amount of annual cash flows that Apple must earn from these projects to have a 10% internal rate of return ( Hint: Identify the 10-period, 10% factor from the present value of an annuity table, and then divide $2.12 billion by this factor to get the annual cash flows necessary.)
Fast Forward
2. Access Apple's financial statements for fiscal years ended after September 28, 2013, from its website ( Apple.com ) or the SEC's website ( SEC.gov ).
a. Determine the amount that Apple invested in capital assets for the most recent year. ( Hint: Refer to the statement of cash flows.)
b. Assume a 10-year life and a 10% internal rate of return. What is the amount of cash flows that Apple must earn on these new projects