Logan, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:
The present value factors of $1 due 3 years from now are:
The annuity present value factors of $1 per year due at the end of each of 3 years are:

-The internal rate of return for Investment A is approximately what percentage?

Question

Logan, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:
 The present value factors of $1 due 3 years from now are:
 The annuity present value factors of $1 per year due at the end of each of 3 years are:
 
-The internal rate of return for Investment A is approximately what percentage?

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. Without specific cash flow details, the IRR is typically estimated based on the context or given data, which in this case suggests 12% as the approximate IRR for Investment A.