A project is estimated to cost $273,840 and provide annual net cash flows of $60,000 for 7 years.Determine the internal rate of return for this project, using the following present value of an annuity table.
Definitions:
Cash Flows
The sum of all money transfers into and from a business, significantly altering its capacity to handle liquid assets.
Annuity
A financial product delivering fixed payments to an individual, typically over a period of time or for life, often used for retirement savings.
Sinking Fund
An arrangement to guarantee that funds are available to pay off a bond’s principal at maturity.
Payments
The transfer of money or goods in exchange for products, services, or to fulfill a legal obligation.
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