James Bruce is the CEO of Bruce Industries.James is interested in purchasing new pollution abatement equipment because the current equipment is outdated and not efficient.The controller of the company has identified equipment that costs $104,110 and will provide annual cash operating inflows of $28,290 for 5 years.The equipment currently being used is 3 years old and could be sold for $2,130.What is the equipment's internal rate of return?
$$\begin{array}{lllr}
\text { Type of cash flow } & \text { n Periods } & \text { i Interest rate } & \text { Factor } \
\hline \text { PV ordinary annuity } & 5 & 6 \% & 4.21236 \
\text { PV ordinary annuity } & 5 & 8 \% & 3.99271 \
\text { PV ordinary annuity } & 5 & 10 \% & 3.79079 \
\text { PV ordinary annuity } & 5 & 12 \% & 3.60478 \
\text { PV ordinary annuity } & 5 & 15 \% & 3.35216
\end{array}$$

Question

James Bruce is the CEO of Bruce Industries.James is interested in purchasing new pollution abatement equipment because the current equipment is outdated and not efficient.The controller of the company has identified equipment that costs $104,110 and will provide annual cash operating inflows of $28,290 for 5 years.The equipment currently being used is 3 years old and could be sold for $2,130.What is the equipment's internal rate of return?
 $$\begin{array}{lllr} 
\text { Type of cash flow } & \text { n Periods } & \text { i Interest rate } & \text { Factor } \
\hline \text { PV ordinary annuity } & 5 & 6 \% & 4.21236 \
\text { PV ordinary annuity } & 5 & 8 \% & 3.99271 \
\text { PV ordinary annuity } & 5 & 10 \% & 3.79079 \
\text { PV ordinary annuity } & 5 & 12 \% & 3.60478 \
\text { PV ordinary annuity } & 5 & 15 \% & 3.35216
\end{array}$$

Quizplus · Accepted Answer

The Answer of James Bruce is the CEO of Bruce Industries.James is interested in purchasing new pollution abatement equipment because the current equipment is outdated and not efficient.The controller of the company has identified equipment that costs $104,110 and will provide annual cash operating inflows of $28,290 for 5 years.The equipment currently being used is 3 years old and could be sold for $2,130.What is the equipment's internal rate of return?
 $$\begin{array}{lllr} 
\text { Type of cash flow } & \text { n Periods } & \text { i Interest rate } & \text { Factor } \
\hline \text { PV ordinary annuity } & 5 & 6 \% & 4.21236 \
\text { PV ordinary annuity } & 5 & 8 \% & 3.99271 \
\text { PV ordinary annuity } & 5 & 10 \% & 3.79079 \
\text { PV ordinary annuity } & 5 & 12 \% & 3.60478 \
\text { PV ordinary annuity } & 5 & 15 \% & 3.35216
\end{array}$$

James Bruce Is the CEO of Bruce Industries A) 8% B) 10% C) 12% D) 15

James Bruce Is the CEO of Bruce Industries A) 8%
B) 10%
C) 12%
D) 15