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Determine the internal rate of return for the proposal

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Problem - Internal rate of return method

The internal rate of return method is used by Maxwell Construction Co. in analyzing a capital expenditure proposal that involves an investment of $45,420 and annual net cash flows of $12,000 for each of the six years of its useful life.

a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return.

b. Using the factor determined in part (a) and the present value of an annuity of $1 table appearing in this chapter, determine the internal rate of return for the proposal.

Reference no: EM132690487

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