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gulaghasi [49]
3 years ago
6

The capital budgeting director of Sparrow Corporation is evaluating a project that costs $200,000, is expected to last for 10 ye

ars, and produces after-tax cash flows equal to $44,503 per year. If the firm's required rate of return is 14 percent and its tax rate is 40 percent, what is the project's internal rate of return (IRR)
Business
1 answer:
Agata [3.3K]3 years ago
8 0

Answer:

17.37%

Explanation:

The Internal rate of return is the interest rate that gives the same present value as the amount of initial investment for

Calculation of IRR

($200,000) CFO

$44,503       CF1

$44,503       CF2

$44,503       CF3

$44,503       CF4

$44,503       CF5

$44,503       CF6

$44,503       CF7

$44,503       CF8

$44,503       CF9

$44,503       CF10

the project's internal rate of return (IRR) is 17.37%

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Real per capita GDP in Taiwan in 1961 was about $500, but it doubled to about $1000.00 by 1981. a. What was the average annual e
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Answer:

the average annual economic growth rate in Taiwan from 1961 to 1981 was 41.42%

Explanation:

Hi, we need to use the following formula.

FV=PV(1+r)^{t}

Where:

FV = GDP in 1981 ($1,000)

PV = GDP in 1961 ($500)

r = growth rate

t = years from 1981 to 1961 (20 years)

So, it should look like this:

1,000=500(1+r)^{20}

Now, we solve for "r"

\frac{1,000}{500} =(1+r)^{20}

2=(1+r)^{20}

\sqrt[20]{2} -1=r

r=0.4142

So, the growth rate of Taiwan´s GDP is 41.42%

Best of luck.

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