FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for four years.

(a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)
(b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return?

What is the internal rate of return of this investment?
Present value factor
Internal rate of return
%
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Transcribed Image Text:What is the internal rate of return of this investment? Present value factor Internal rate of return %
Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for four years.
(a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the tables provided. Round your present value factor to 4 decimals.)
expand button
Transcribed Image Text:Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for four years. (a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)
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