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Determine a present value factor for an annuity

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Reference no: EM132706987

Problem - Internal rate of return method - The internal rate of return method is used by Leach Construction Co. in analyzing a capital expenditure proposal that involves an investment of $400,125 and annual net cash flows of $75,000 for each of the eight years of its useful life.

Required -

a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return.

b. Using the factor determined in part (a), determine the internal rate of return for the proposal.

Reference no: EM132706987

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