Park Co. is considering an investment that requires immediate payment of $27,000

Question

Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Park Co. requires a 10% return on its investments. 1-a. What is the internal rate of return? (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factorfs) from the tables provided. Round your present value factor to 4 decimals.) I rate of return t value factor 1-b. Based on its internal rate of return, should Park Co. make the investment? O Yes

Explanation / Answer

a Present value factor 3 =27000/9000 Internal rate of return =13% b Yes, make the investment

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---