(Ignore income taxes in this problem. )The following information is available on a new piece of equipment: The life of the equipment is approximately:

Question

(Ignore income taxes in this problem. )The following information is available on a new piece of equipment:  The life of the equipment is approximately:

Quizplus · Accepted Answer

Factor of the internal rate of return = Investment required F1F1F1S1F1F1F10 Annual net cash inflow
= $21,720 F1F1F1S1F1F1F10 $5,000
= 4.344
The factor of 4.344 for 8 years represents an internal rate of return of 16%.

(Ignore Income Taxes in This Problem