The internal rate of return for a project is

Reference no: EM13838998

1. A piece of new equipment will cost $70,000. The equipment will provide a cost savings of $15,000 per year for ten years, after which it will have a $3,000 salvage value. If the required rate of return is 14%, the equipment's net present value is: (Ignore income taxes.)

a $8,240

b $23,888

c $(8,240)

d $9,050

2. If the internal rate of return is used as the discount rate in computing net present value, the net present value will be:

a zero.

b negative.

c unknown.

d positive.

3. The internal rate of return for a project is the discount rate that makes the net present value of the project equal to zero: True or False

Reference no: EM13838998

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