Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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 6%. Should the company invest in this project on the basis of internal rate of return?
Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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 6%. Should the company invest in this project on the basis of internal rate of return?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Perez Company is considering an investment of $30,485 that provides net cash flows of $9,000 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 6%. Should the company invest in this project on the basis of internal rate of return?
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Transcribed Image Text:Perez Company is considering an
investment of $30,485 that provides net
cash flows of $9,000 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 6%. Should the
company invest in this project on the
basis of internal rate of return?
Complete this question b
Required A
Required B
What is the internal rate of r
Present value factor
Internal rate of return
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