Question
Preston Corporation is evaluating its potential investment in a $225,660 piece of equipment with a three-year life and no salvage value. The company anticipates that pre-tax cash flows in each of the three years will equal to 22%, 44%, and 66%, respectively, of the investment’s face value. The tax rate is 28%. Pre-tax cash flows, discounted at 10 percent, are $427,697, undiscounted after-tax cash flows are $279,185, and after-tax cash flows, discounted at 10 percent, are $225,660. The internal rate of return is:
Answers
Writeacher
If you really want an expert to help you, be sure to follow directions and type your <u>subject</u> in the <b>School Subject</b> box. Any other words, <u>including obscure abbreviations</u>, are likely to delay responses from a teacher who knows that subject well.
Also, if all you do is post your entire assignment, <b>with no evidence of thinking on your part</b>, nothing will happen since <u>no one here will do your work for you</u>.
But if you are specific about what you don't understand about the assignment or exactly what help you need, someone might be able to assist you. <b>Ask specific questions!</b>
Also, if all you do is post your entire assignment, <b>with no evidence of thinking on your part</b>, nothing will happen since <u>no one here will do your work for you</u>.
But if you are specific about what you don't understand about the assignment or exactly what help you need, someone might be able to assist you. <b>Ask specific questions!</b>
Anonymous
Preston Corporation is evaluating its potential investment in a $225,660 piece of equipment with a three-year life and no salvage value. The company anticipates that pre-tax cash flows in each of the three years will equal to 22%, 44%, and 66%, respectively, of the investment's face value. The tax rate is 28%. Pre-tax cash flows, discounted at 10 percent, are $427,697, undiscounted after-tax cash flows are $279,185, and after-tax cash flows, discounted at 10 percent, are $225,660. The internal rate of return is:
a. 10%
b. 44%
c. 22%
d. 23.7%
a. 10%
b. 44%
c. 22%
d. 23.7%