Choices for the last requirement, "determine the approximate internal rate of return from the choicies (pick the closest answer.a. 29% b. 20%c. 26%d. 22% Anderson Systems is considering a project costingP100,000 that has the following cash flow, salvagevalue and WACC data.WACC: 10.00%Cash SalvageFlow ValueYear50,000 35,000Year30,000 25,000Year40,000 15,000Year45,000 7,5004.Year30,0005.1.2. The following are the questions/requirements for thisdata set. Fill-up the answers in the next 6 questions:(Please follow specific instructions)Determine the payback period. (Round your finalanswer to the nearest two decimal places)Determine the bailout period. (Round your finalanswer to the nearest two decimal places)• Determine the accounting rate of return. (Pleaseanswer these percentages in amounts with twodecimal points e.g. X.Xx; do not denote percentageanymore)• Determine the net present value. (Round your finalanswer to the nearest peso; answers based on exactand rounded pv factors are both accepted)• Determine the profitability index (Round your finalanswer to the nearest two decimal places; answersbased on exact and rounded pv factors are bothaccepted)Determine the approximate internal rate of returnfrom the choices. (Pick the closest answer)

IRR is a rate at which present value of cash inflows is equal to present value of cashoutflows.

Answered: 9% b. 20% c. 26% d. 22

Business

Finance

9% b. 20% c. 26% d. 22

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Choices for the last requirement, "determine the approximate internal rate of return from the choicies (pick the closest answer.

a. 29%

b. 20%

c. 26%

d. 22%

Anderson Systems is considering a project costing
P100,000 that has the following cash flow, salvage
value and WACC data.
WACC: 10.00%
Cash Salvage
Flow Value
Year
50,000 35,000
Year
30,000 25,000
Year
40,000 15,000
Year
45,000 7,500
4.
Year
30,000
5.
1.
2.

The following are the questions/requirements for this
data set. Fill-up the answers in the next 6 questions:
(Please follow specific instructions)
Determine the payback period. (Round your final
answer to the nearest two decimal places)
Determine the bailout period. (Round your final
answer to the nearest two decimal places)
• Determine the accounting rate of return. (Please
answer these percentages in amounts with two
decimal points e.g. X.Xx; do not denote percentage
anymore)
• Determine the net present value. (Round your final
answer to the nearest peso; answers based on exact
and rounded pv factors are both accepted)
• Determine the profitability index (Round your final
answer to the nearest two decimal places; answers
based on exact and rounded pv factors are both
accepted)
Determine the approximate internal rate of return
from the choices. (Pick the closest answer)

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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