An investment costs $17,944 and will generate cash flow of $4,000 annually for six years. The firm's cost of capital is 10 percent. a. What is the investment's internal rate of return? Round your answer to the nearest whole number. b. Based on the internal rate of return, should the firm make the investment? c. What is the investment's net present valuc? Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. d. Based on the net present value, should the firm make the investment?

An investment costs $17,944 and will generate cash flow of $4,000 annually for six years. The firm's cost of capital is 10 percent. a. What is the investment's internal rate of return? Round your answer to the nearest whole number. b. Based on the internal rate of return, should the firm make the investment? c. What is the investment's net present valuc? Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. d. Based on the net present value, should the firm make the investment?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...

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