Executive Limousine Service Recently Acquired Limousines Worth $120,000

question 85

Short Answer

Executive Limousine Service recently acquired limousines worth $120,000. The projected returns over the next 3 yr, the time period the limousines will be in service, are $80,000 at the end of the first year, $60,000 at the end of the second year, and $40,000 at the end of the third year. Find the internal rate of return on the investment. Round your answer to the nearest hundredth, if necessary.
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__________ % per year

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Definitions:

Long-Term Borrowing

Loans or debts obtained with repayment schedules extending over a period longer than one year.

Dividends Paid

A corporation's distribution of earnings to its shareholders, generally as a profit allocation.

Return On Assets

A financial ratio that indicates how profitable a company is relative to its total assets, measuring efficiency in generating profits.

Net Income

The net income of a business following the deduction of all costs, such as operational expenses and taxes, from its overall revenue.