Determine the internal rate of return on the investment

Assignment Help Accounting Basics
Reference no: EM13975561

An investment costing $200,000 will reduce operating costs by $35,000 per year for 12 years. The required rate of return is 16%.

1. Determine the internal rate of return on the investment, ignore taxes.

2. Determine the net present value of the investment, ignore taxes.

3. Should the investment be undertaken? Why?

4. Show all calculations and support your investment decision with calculations.

Verified Expert

"As required, the solution to the questions are provided in excel. Appropriate calculations are done wherever required to support and justify the points made in the answers. References have also been provided in a separate tab for your easy perusal"

Reference no: EM13975561

Questions Cloud

What is the height of the image : The figure shows an object and its image formed by a thin lens. Assume that L=15.0 cm and y=3.25mm. what is the focal length of the lens? what is the height of the image?
Does a monopolist achieve efficiency in its production : Does a monopolist achieve efficiency in its production (that is, does it produce where MR = MC)? Will society face a welfare loss in a monopolistic market?
Figure out what is right or wrong on their own : Many cultures use the idea of Santa Claus making a list of who is naughty/nice as a way to manage the behaviors of children (because those children on the "nice list" receive presents). Do you feel that this parental behavior is morally reasonable..
What is the decibel level of a sound : The decibel level of a sound is given by dB = 10 log (E/E0), where E0 = 10-12 watts/m2 and E is the intensity of the sound. What is the decibel level of a sound with intensity E =10-4
Determine the internal rate of return on the investment : Determine the internal rate of return on the investment, ignore taxes and determine the net present value of the investment, ignore taxes.
What is shape of your distance vs time curve for the object : What is the shape of your distance vs. time curve for the falling object, and what does this tell you about the object's velocity?
What is the current that flows in this circuit : The figure shows a rod of length H caused to move at constant speed V along horizontal conducting rails connected on one end by a resistor of resistance R. The magnetic field in which the rod moves is provided by a current I1 in a long parallel wi..
Construction of confidence interval for population mean : 1. What role does the central limit theorem play in the construction of a confidence interval for the population mean? 2. In using the standard normal distribution to construct a confidence interval for the population mean, what two assumptions are..
Does this invalidate the emh : Warren Buffett has been a very successful investor. In 2008, Luisa Kroll reported that Buffett topped Forbes Magazine's list of the world's richest people with a fortune estimated to be worth $62 billion (March 5, 2008, The world's billionaires, For..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare a value analysis schedule

Prepare a value analysis schedule

  Journal entry detailing the sale of fax machine

Record on Foster's books the July 1,2008 journal entry detailing the sale of the fax machine to Eagle.

  Total direct labor variance

The standard labor time for the Cutting and Sewing departments is 0.20 hour and 0.30 hour per unit, respectively.What is the total direct labor variance for (1) the cutting department?

  Robert haddon contributed 70000 in cash and land worth

robert haddon contributed 70000 in cash and land worth 130000 to open a new business rh consulting. which of the

  Show the necessary entries in the books of wilz

Required: Show the necessary entries in the books of Wilz Ventures Plc.

  What is z-prime stock price

What is Z-prime stock price

  Price discrimination on the part of the firm

If you purchased a new model of a digital camera right after it is released, you will likely pay more than if you purchase it six months after release. Explain why this is an example of price discrimination on the part of the firm.

  If swannanoa companyamp39s budgeted sales are 1000000 fixed

if swannanoa companyamp39s budgeted sales are 1000000 fixed costs are 350000 and variable costs are 600000 what is the

  Corporation as a contribution to capital

Mary and Jane, unrelated taxpayers, hold Gray Corporation's stock equally. One year before the complete liquidation of Gray, Mary transfers land (basis of $600,000, fair market value of $180,000) to Gray Corporation as a contribution to capital.

  The account balances appearing on the trial balance below

the account balances appearing on the trial balance below were taken from the general ledger of flops copy shop at

  Examples of markets in which countervailing power

Describe the economic effects of countervailing power, and cite examples of markets in which countervailing power is observed.

  Basics of cumulative preferred stock

On January 2, 2007, Riley Corporation issued 20,000 shares of 6% cumulative preferred stock at $100 par value. On December 31, 2010, Riley Corporation declared and paid its first dividend.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd