Answered: Apache Junction Company is evaluating a…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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NPV and IRR:
Equal Annual Net Cash Inflows
Apache Junction Company is evaluating a capital expenditure proposal that requires an initial investment of $44,190, has predicted cash inflows of $9,000 per year for 13 years, and has no salvage value.

(a) Using a discount rate of 16 percent, determine the net present value of the investment proposal. (Round to the nearest whole number.)
$Answer

(b) Determine the proposal's internal rate of return.
Answer %

(c) What discount rate would produce a net present value of zero?
Answer %

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