A Company Is Considering a Five-Year Project

question 72

Essay

A company is considering a five-year project.It plans to invest $60,000 now and forecasts cash flows of $16,200 for each year.The company requires a hurdle rate of 12%.Calculate the internal rate of return to determine whether it should accept this project.Selected factors for a present value of an annuity of 1 for five years are shown below:
$\begin{array}{lc}\underline {\text { Interest }} &\underline {\text { Present Value of an Annuity of 1 }}\\ \underline{\text { Rate }}& \underline{\text { Factor }} \\{10 \%} &{3.7908}\\12 \% & 3.6048 \\14 \% & 34331\end{array}$

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Definitions:

Mechanical Activity

Physical actions or movements brought about by the force of muscles on the skeleton, aiding in bodily functions and locomotion.

Pepsin Activity

The process by which the enzyme pepsin breaks down proteins into smaller peptides, crucial for protein digestion in the stomach.

Optimal Ph

The specific pH value at which an enzyme or biochemical pathway operates with maximum efficiency.

Pepsinogen

A precursor enzyme secreted by the stomach, which is converted into pepsin for protein digestion.