Use the Following Information for Questions 106-108 $\text { Present Value of an Annuity of } 1$

question 48

Multiple Choice

Use the following information for questions 106-108.
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 requires a 10% rate of return. $\text { Present Value of an Annuity of } 1$
$\begin{array}{ll}\text { Periods } &8\%& 9 \% & 10 \% & 11 \%& 12 \%&15\%\\5&4.623&4.486&4.355&4.231&4.111&3.784\end{array}$

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

• A) 9%
• B) 10%
• C) 11%
• D) 12%

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Definitions:

External Financing

The process of obtaining capital from outside sources, such as banks, investors, or financial markets to fund operations, growth, and expansion projects.

Cash Sooner

A financial strategy aimed at accelerating cash inflows or reducing the time it takes to receive payments or revenues.

Fund-Raising Strategy

A planned approach to generating financial support for a project or organization, often involving various funding sources and methods.

Constituencies

Groups or individuals that an organization must consider and accommodate in its decision-making processes.