Tracey Table's is considering an equipment investment that will cost $950,000. Projected net cash inflows over...

Tracey Table's is considering an equipment investment that will cost $950,000. Projected net cash inflows over the equipment's three-year life are as follows: Year 1: $488,000;Year 2: $390,000; and Year 3: $300,000. Tracey wants to know the equipment's IRR.

Requirement

Use trial and error to find the IRR within a 2% range. (Hint: Use Tracey's hurdle rate of 10% to begin the trial-and-error process.) Use a business calculator or spreadsheet to compute the exact IRR. Begin by calculating the NPV at three rates: 10%,12%,and 14%.(Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.)

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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