(Ignore income taxes in this problem.) Welch Company purchased a piece of equipment with the following data:$\begin{array}{lr}
\text { Useful life. } & \text { 6 years } \
\text { Yearly net cash inflow. } &£ 45,000\
\text { Salvage value.} &£ 0\
\text { Internal rate of return } & 18 \%\
\text { Required rate of return } & 14 \%\
\end{array}$

The initial cost of the equipment was

Question

(Ignore income taxes in this problem.) Welch Company purchased a piece of equipment with the following data:$\begin{array}{lr}
  \text { Useful life. } & \text { 6 years } \
 \text { Yearly net cash inflow. } &£ 45,000\
 \text {  Salvage value.} &£ 0\
 \text { Internal rate of return } & 18 \%\
 \text { Required rate of return } & 14 \%\
\end{array}$

The initial cost of the equipment was

Quizplus · Accepted Answer

The given information only provides the initial cost of the equipment, which is £157,410. Without any other information or basis to calculate depreciation, it is impossible to determine the cost of the equipment at any other point in time. Therefore, the best choice is A) £157,410, the initial cost provided.

(Ignore Income Taxes in This Problem The Initial Cost of the Equipment Was A)£157,410

(Ignore Income Taxes in This Problem The Initial Cost of the Equipment Was

A)£157,410