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gladu [14]
2 years ago
8

A company is considering investing in a new machine that requires a cash payment of $38,198 today. The machine will generate ann

ual cash flows of $15,904 for the next three years. What is the internal rate of return if the company buys this machine?
Business
1 answer:
PolarNik [594]2 years ago
6 0

Answer:

Internal rate of return = 12%

Explanation:

Below is the calculation of internal rate of return:

The new machine requires cash payment = $38198

Annual cash flows = $15904

Time period = 3 years

First divide the cash payment with the annual cash flow and then look at the factor table to find the interest rate at 3rd year.

Factor = 38198 / 15904 = 2.40

Now look the value 2.40 in the table:

Thus Internal rate of return = 12%

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3 0
2 years ago
Your local pawn shop loans money at an annual rate of 23 percent and compounds interest weekly. What is the actual rate being ch
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Answer:

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Explanation:

The formula to compute the effective annual rate of the loan is shown below:

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2 years ago
Why do you think compound interest is described by some as a mathematical explosion?
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Explanation:

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2 years ago
Mrs. Smith operates a business in a competitive market. The current market price is $7.50. At her profit-maximizing level of pro
adelina 88 [10]

Answer:

Option (D) is correct.

Explanation:

Given that,

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