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masha68 [24]
3 years ago
10

Galindo Long-Haul, Inc., is considering the purchase of a tractor-trailer that would cost $178,848, would have a useful life of

8 years, and would have no salvage value. The tractor-trailer would be used in the company's hauling business, resulting in additional net cash inflows of $36,000 per year. The internal rate of return on the investment in the tractor-trailer is closest to:
Business
1 answer:
kondor19780726 [428]3 years ago
8 0

Answer:

the internal rate of return is 12%

Explanation:

The computation of the internal rate of return is as follows;

Year        Cash flows            

0             -$178,848

1                $36,000

2               $36,000

3               $36,000

4               $36,000

5               $36,000

6               $36,000

7               $36,000

8               $36,000

Now apply the IRR formula

= IRR()

After applying it, the internal rate of return is 12%

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Answer:

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