Find the investments internal rate of return

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Question -

Westmont Publishing is considering the purchase of a used printing press costing $75,200. The printing press would generate a net cash inflow of $31,310 a year for 3 years.  At the end of 3 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation. The present value factors of an annuity of $1.00 for different rates of return are as follows:

 

Cost of Capital

Period

8%

10%

12%

14%

16%

2

1.78326

1.73554

1.69005

1.64666

1.60523

3

2.57710

2.48685

2.40183

2.32163

2.24589

4

3.31213

3.16987

3.03735

2.91371

2.79818

The investments internal rate of return (rounded to the nearest percent) is:

Reference no: EM131679941

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