An advertising campaign will cost $306,000 for planning and $48,000 in each of the next six years. It is expected to increase revenues permanently by $48,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $24,000 in the first year, declining by $6,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? the MARR, so the advertising campaign The IRR is percent, which is good investment. (Round to one decimal place as needed.) a

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
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An advertising campaign will cost $306,000 for planning and $48,000 in each of the next six years. It is
expected to increase revenues permanently by $48,000 per year. Additional revenues will be gained in the
pattern of an arithmetic gradient with $24,000 in the first year, declining by $6,000 per year to zero in the fifth
year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment?
the MARR, so the advertising campaign
The IRR is percent, which is
good investment.
(Round to one decimal place as needed.)
a
Transcribed Image Text:An advertising campaign will cost $306,000 for planning and $48,000 in each of the next six years. It is expected to increase revenues permanently by $48,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $24,000 in the first year, declining by $6,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? the MARR, so the advertising campaign The IRR is percent, which is good investment. (Round to one decimal place as needed.) a
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