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Accounting

Problem:

Cleaners, Inc. is considering purchasing equipment costing $60,000 with a 6-year useful life. The equipment will provide cost savings of $14,600 and will be depreciated straight-line over its useful life with no salvage value. Cleaners require a 10% rate of return.
Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15%

6 4.623 4.486 4.355 4.231 4.111 3.784

Required:

Question: What is the approximate internal rate of return for this investment?

A) 9%

B) 11%

C) 10%

D) 12%

Note: Please provide full description.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165009

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