Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:...
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Accounting
Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Truck Project Machine Initial investment $400,000 $600,000 Annual net income 30,000 46,000 Net annual cash flow 110,000 146,000 Estimated useful life 5 years 6 years Salvage value -0- -0- The company requires a 10% rate of return on all new investments
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111
The internal rate of return for Project Machine is approximately
Answers will be any of the following
10%
12%
11%
9%
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