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Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating...

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Accounting

Payback Period, IRR, and Minimum Cash Flows

The management of Mesquite Limited is currently evaluating the following investment proposal:

Time 0

Year 1

Year 2

Year 3

Year 4

Initial Investment

$240,000

-

-

-

-

Net operating

Cash inflows

-

$100,000

$100,000

$100,000

$100,000

  1. Determine the proposals payback period
  2. Determine the proposals internal rate of return
  3. Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 14 percent. Round to the nearest dollar

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