A company is considering a 5-year project. It plans to invest $62,000 now and it forecasts cash flows for each year of $16,200. The company requires a hurdle rate of 12%. Calculate the internal rate of return to determine whether it should accept this project. Selected factors for a present value of an annuity of $1 for five years are shown below:
$\begin{array} { l l }
\text { Interest rate } & \text { Present value of an annuity of } \$ 1 \
& \text { factor } \
10 \%& 3.7908 \
12 \%& 3.6048 \
14 \% & 3.4331
\end{array}$

Question

A company is considering a 5-year project. It plans to invest $62,000 now and it forecasts cash flows for each year of $16,200. The company requires a hurdle rate of 12%. Calculate the internal rate of return to determine whether it should accept this project. Selected factors for a present value of an annuity of $1 for five years are shown below:
$\begin{array} { l l } 
\text { Interest rate } & \text { Present value of an annuity of } \$ 1 \
 & \text { factor } \
 10 \%& 3.7908 \
12 \%& 3.6048 \
14 \% & 3.4331 
\end{array}$

Quizplus · Accepted Answer

The Answer of A company is considering a 5-year project. It plans to invest $62,000 now and it forecasts cash flows for each year of $16,200. The company requires a hurdle rate of 12%. Calculate the internal rate of return to determine whether it should accept this project. Selected factors for a present value of an annuity of $1 for five years are shown below:
$\begin{array} { l l } 
\text { Interest rate } & \text { Present value of an annuity of } \$ 1 \
 & \text { factor } \
 10 \%& 3.7908 \
12 \%& 3.6048 \
14 \% & 3.4331 
\end{array}$

A Company Is Considering a 5-Year Project