What robust expected rate of return on the investment is

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Robust Company is planning to invest P120,000 in a ten-year project. Robust estimates that the annual cash inflow net of income taxes from this project will be P20,000. The company's desired rate of return on investment of this type is 10%.

Information on present value factors is as follows:

                                                                    At 10%                   At 12%
Present value of P1 for 10 periods                         0.386                     0.322
Present value of an annuity of P1 for 10 periods        6.145                    5.650

Problem 1: Robust expected rate of return on this investment is:

A. More than 10% but less than 12%
B. 12%
C. More than 0% but less than 10%
D. 10%

Reference no: EM133007499

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