Calculate the equipments internal rate of return

Assignment Help Financial Accounting

Reference no: EM13793542

NOTE: No Excel template is provided for this problem. Please create your own spreadsheet to calculate the solution.

The Pearce Club, Inc., is considering investing in an exercise machine that costs $5,000 and would increase revenues by $1,500 a year for five years. The machine would be depreciated over its five-year useful life via the straight-line method and would have no salvage value.

Required:

Calculate the equipment's internal rate of return. Assume that the tax rate is 30 percent. Do not enter the percent sign (%). Round your final answer to two decimal places.

Reference no: EM13793542

Questions Cloud

Effective interest rate method to amortize bond discount : On January 1, 2016, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8%, and a 5-year term to maturity. Interest is payable cash on December 31 of each year. Parker used the effective interest rate method to amor..

What strategies are you using now : What does it take for you personally to be successful academically? What strategies are you using now? What might you try in the future?

Determine the amount of the discount on the day of issue : On January 1, 2016, the Diamond Association issued bonds with a face value of $300,000, a stated rate of interest of 6%, and a 10-year term to maturity Interest is payable in cash on December 31 of each year. Determine the amount of the discount on t..

Create a procurement management plan : How estimates will be obtained from vendors. Operating procedures between the project team and the contracting office

Calculate the equipments internal rate of return : The Pearce Club, Inc., is considering investing in an exercise machine that costs $5,000 and would increase revenues by $1,500 a year for five years. The machine would be depreciated over its five-year useful life via the straight-line method and wou..

Produce the most all encompassing definition of technology : Produce the most all encompassing definition of technology while discussing Heidegger's article. Having discussed willed ignorance during the critical thinking discussion, now is your chance for some self-reflection.

Like-kind exchange treatment : Like-Kind Exchange Treatment, Do you like it, or dislike it in theory? What do you think would be its biggest advantage and disadvantage in practice.

World of business interacts with the legal realm : Consider how the world of business interacts with the legal realm. What skills does a non-legal person need as an employee? What legal training do you feel a businessperson needs in order to make good decisions? Please refer to U.S. Bureau of Labor S..

Case study on online purchasing at mcdonalds : Draw a supply chain map showing the various parties in McDonald's supply chain: food growers, manufacturers, distributors, corporate headquarters, and restaurants. Describe the type of information that needs to be exchanged between the partners in..

User Account

All Pages