A company has a minimum required rate of return of 8 and is, Ask an Expert

Accounting

Use the following table,

Present Value of an Annuity of 1

Period 8% 9% 10%
1 .926 .917 .909
2 1.783 1.759 1.736
3 2.577 2.531 2.487

A company has a minimum required rate of return of 8% and is considering investing in a project that costs $136,674 and is expected to generate cash inflows of $54,000 each year for three years. The approximate internal rate of return on this project is:

A) 8%.
B) 9%.
C) 10%.
D) less than the required 8%.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M943703

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