User Account

All Pages

Calculate internal rate of return of investment opportunitu

Assignment Help Accounting Basics
Reference no: EM132461884

Baird Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company's cash outflow for operating expenses by $1,284,000 per year. The cost of the equipment is $7,394,586.82. Baird expects it to have a 9-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

TABLE 2

PRESENT VALUE OF AN ANNUITY OF $1

 

 

 

 

 

 

 

n

4%                   5%

6%

7%

8%

9%

10%

12%

14%

16%

20%

1

0.961538           0.952381

0.943396

0.934579

0.925926

0.917431

0.909091

0.892857

0.877193

0.862069

0.833333

2

1.886095           1.859410

1.833393

1.808018

1383265

1.759111

1335537

1.690051

1.646661

1.605232

1.527778

3

2.775091           2.723248

2.673012

2.624316

2.577097

2.531295

2.486852

2.401831

2.321632

2.245890

2106481

4

3.629895           3.545951

3.465106

3.387211

3.312127

3.239720

3169865

3.037349

2.913712

2798181

2.588735

5

4.451822           4.329477

4.212364

4100197

3.992710

3.889651

3390787

3.604776

3.433081

3.274294

2.990612

6

5.242137           5.075692

4.917324

4766540

4.622880

4.485919

4.355261

4111407

3.888668

3.684736

3.325510

7

6.002055            5386373

5.582381

5.389289

5.206370

5.032953

4.868419

4.563757

4.288305

4.038565

3.604592

8

6332745           6.463213

6.209794

5.971299

5746639

5.534819

5.334926

4.967640

4.638864

4.343591

3.837160

9

7.435332            7107822

6.801692

6.515232

6.246888

5.995247

5.759024

5.328250

4.946372

4.606544

4.030967

10

8110896            7721735

7.360087

7.023582

6310081

6.417658

6144567

5.650223

5.216116

4.833227

4192472

11

8360477           8.306414

7.886875

7.498674

7138964

6.805191

6.495061

5.937699

5.452733

5.028644

4.327060

12

9.385074           8.863252

8.383844

7.942686

7.536078

7160725

6.813692

6194374

5.660292

5197107

4.439217

13

9.985648           9.393573

8.852683

8.357651

7.903776

7.486904

7103356

6.423548

5.842362

5.342334

4.532681

14

10.563123           9.898641

9.294984

8345468

8.244237

7386150

7.366687

6.628168

6.002072

5.467529

4.610567

15

11118387           10.379658

9712249

9107914

8.559479

8.060688

7.606080

6.810864

6142168

5.575456

4.675473

16

11.652296         10.837770

10105895

9.446649

8.851369

8.312558

7.823709

6.973986

6.265060

5.668497

4729561

17

12165669         11.274066

10.477260

9.763223

9121638

8.543631

8.021553

7119630

6.372859

5.748704

4.774634

18

12.659297         11.689587

10.827603

10.059087

9.371887

8.755625

8.201412

7.249670

6.467420

5.817848

4.812195

19

13133939         12.085321

11158116

10.335595

9.603599

8.905115

8.364920

7.365777

6.550369

5.877455

4.843496

20

13.590326         12.462210

11.469921

10.594014

9.818147

9128546

8.513564

7.469444

6.623131

5.928841

4.869580

Required

Question A. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.)

Question B. Indicate whether the investment opportunity should be accepted.

Reference no: EM132461884

Questions Cloud

Versions of independent samples t test : Why there are two Versions of Independent Samples t Test ("Equal variances assumed" and "Equal variances not assumed")
Define the term social support : Define the term Social Support and explain what relevant scholarly research states about it. Describe your personal experiences with social support systems.
Percentile that corresponds to life span : Using the empirical rule, find the percentile that corresponds to each life span
Record the number of traffic fatalities in a state next year : Record the number of traffic fatalities in a state next year. Observe the length of time a new digital video recorder will continue to work satisfactorily
Calculate internal rate of return of investment opportunitu : Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.)Indicate whether the investment opportunity should
Explain the primary goals of the evaluation : Explain the three (3) primary goals of the evaluation. Analyze three (3) major cultural or political issues that might be encountered and explain how they might
Give a brief explanation of the meaning of the interval : Let p represent the proportion of all supermarket shoppers who always stock up on an item when they find a real bargain. Find a point estimate for p.
What do psychoanalytic theories have in common : What do psychoanalytic theories have in common? Explain the similarities and differences. Describe your understanding of Piaget's Cognitive Equilibrium?
Discuss about the definition of plagiarism : In the Webster definition of plagiarism, recycling one's own papers would fall under "to present as new and original an idea or product derived.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd