Assume research in motion invested 834 million to expand

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Assume Research In Motion invested $834 million to expand its manufacturing capacity. Assume that these assets have a seven-year life, and that Research In Motion requires a 12% internal rate of return on these assets.

Required

1. What is the amount of annual cash flows that Research In Motion must earn from these projects to have a 12% internal rate of return?

Access RIM%u2019s financial statements for fiscal years ended after February 27, 2010, from its Website RIM.com) or the SEC%u2019s Website

a. Determine the amount that RIM invested in capital assets for the most recent year. (Hint: Refer to the statement of cash flows.)

b. Assume a seven-year life and a 12% internal rate of return. What is the amount of cash flows that RIM must earn on these new projects? Please try to answer in steps and completed, correct answers.

Reference no: EM13578889

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