ACES is a quality auditing firm. It has dedicated a team of managers, business analysts, and system analysts to develop an infor
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Answer:
We can say the rate is close enought to 14%
Explanation:
tthe IRR will be the rate at wich the NPV is zero
The cash flow are an annuity of 4,120 for 6 years
NPV = present value of cash flow - investment
0 = PV of annuity - investment
0 = PV of annuity - 16,000
PV = 16,000
C 4120
time 6
rate IRR
We divide the PV by the annuity to get the annuity factor
16,000 / 4,120 = 3,88349
We can look into the annuity table for a factor at time = 6 close to this figure
we have
14% factor of 3.889
15% factor of 3.784
We can say the rate is close enought to 14%
Answer: 1.67 years
Explanation:
Pay back period calculates the amount of years the cumulative cash flows from an investment equals the amount of money invested.
The table attached explains how the payback was calculated.
The $3600 cost of the cart would be recouped between the first and second years. Therefore, it would be calculated as 1 year + $2400 / $3600 = 1.67 years
I hope my answer helps you.
