Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 36,500 Annual cash inflows $ 8,600 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The internal rate of return of the investment is closest to: Multiple Choice 24 % 22% 20% 26%

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
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Joetz Corporation has gathered the following data on a proposed investment project (Ignore
income taxes.): Investment required in equipment $ 36,500 Annual cash inflows $ 8,600 Salvage
value of equipment $ 0 Life of the investment 15 years Required rate of return 10% The company
uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout
a year except for the initial investment. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to
determine the appropriate discount factor(s) using the tables provided. The internal rate of return
of the investment is closest to: Multiple Choice 24 % 22 % 20% 26%
Transcribed Image Text:Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 36,500 Annual cash inflows $ 8,600 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The internal rate of return of the investment is closest to: Multiple Choice 24 % 22 % 20% 26%
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