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kakasveta [241]
3 years ago
8

Internal Rate of Return Lisun Company produces a variety of gardening tools and aids. The company is examining the possibility o

f investing in a new production system that will reduce the costs of the current system. The new system will require a cash investment of $4,607,200 and will produce net cash savings of $800,000 per year. The system has a projected life of 9 years.
Required:

Calculate the IRR for the new production system.
Business
1 answer:
eimsori [14]3 years ago
6 0

Answer:

Internal Rate of Return (IRR) = 10%

Explanation:

The computation of IRR for the new production system is shown below:-

PV factor for Internal Rate of Return = Investment cost ÷ Annual net cash savings

PV factor for Internal Rate of Return = $4,607,200 ÷ $800,000

= 5.759

The PV factor 5.759 in Present value of a Annuity of $1 table for 9 years is closest to 10%

Internal Rate of Return (IRR) = 10%

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Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest under these arra
sladkih [1.3K]

Answer:

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An Amazon seller is deciding which of their products to invest in for the next quarter to maximize their profits. They have each
Aleksandr [31]

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Formula: The maximum profit a seller can achieve through this strategy is (k , profit):

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4 0
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