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emmasim [6.3K]
3 years ago
6

Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash f

lows of $13,000,000, $23,000,000, and 29,000,000 over the next three years. The cost of capital is 20 percent. What is the internal rate of return that Turnbull can earn on this project? (Do not round intermediate computations. Round final answer to the nearest percent.)
Business
1 answer:
zepelin [54]3 years ago
6 0

Answer:

44%

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

Internal rate of return can be determined using a financial calculator

Cash flow in year 0 = $-30 million

Cash flow in year 1 = $13 million

Cash flow in year 2 = $23 million

Cash flow in year 3 = $29 million

IRR = 44%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

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Given that

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7 0
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Services differ from manufacturing for all of the following reasons EXCEPT: a. Heterogeneity b. Time-perishable capacity c. Simu
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Production and consumption occuring at the same time will not make products to differ.

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4 0
3 years ago
Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 75,000 $1 par c
valkas [14]

Answer:

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4 0
3 years ago
'As fewer people buy gym memberships, the demand for running shoes will decrease and the price of a pair of running shoes will i
olchik [2.2K]

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This statement is <u><em> false</em></u> because <em><u>a decrease in demand for running shoes does not increase the price of a pair of running shoes and an increase in the price of a pair of running shoes does not increase the supply of running shoes. </u></em>

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