The following data pertain to an investment project (Ignore income taxes.): Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided.
The internal rate of return is closest to:

Question

The following data pertain to an investment project (Ignore income taxes.):  Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided.
The internal rate of return is closest to:

Quizplus · Accepted Answer

Factor of the internal rate of return = Investment required ÷ Annual net cash inflow
= $34,055 ÷ $5,000 = 6.811
This factor is the present value of an annuity for 15 periods at 12% per period.

The Following Data Pertain to an Investment Project (Ignore Income