Glossimer Thread Company is evaluating an investment that will cost $720,000 and will yield cash inflows of $230,000 in the first year, $325,000 in the second year, and $360,000 in the third and the final year. Use the table below and determine the internal rate of return. Present value of $1: 8% 9% 10% 11% 12% 1 0.926 2 0.857 3 0.794 4 0.735 5 0.681 0.917 0.909 0.901 0.893 0.842 0.826 0.812 0.797 0.772 0.731 0.712 0.659 0.593 0.636 0.708 0.650 0.683 0.621 0.567 The IRR of the project will be O A. less than 11%, more than 10% O B. between 11% and 12% OC. more than 12% O D. less than 10%

Glossimer Thread Company is evaluating an investment that will cost $720,000 and will yield cash inflows of $230,000 in the first year, $325,000 in the second year, and $360,000 in the third and the final year. Use the table below and determine the internal rate of return. Present value of $1: 8% 9% 10% 11% 12% 1 0.926 2 0.857 3 0.794 4 0.735 5 0.681 0.917 0.909 0.901 0.893 0.842 0.826 0.812 0.797 0.772 0.731 0.712 0.659 0.593 0.636 0.708 0.650 0.683 0.621 0.567 The IRR of the project will be O A. less than 11%, more than 10% O B. between 11% and 12% OC. more than 12% O D. less than 10%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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