A Company Is Considering a 5-Year Project

question 17

Essay

A company is considering a 5-year project. It plans to invest $60,000 now and it forecasts cash flows for each year of $16,200. 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:

---

Definitions:

Command and Control

A hierarchical organizational structure and management style where decisions and directives come from the top and are implemented without questioning by lower levels of the organization.

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

Civil Disobedience

The active, professed refusal to obey certain laws, demands, or commands of a government, as a form of peaceful political protest.

Political Strategies

Approaches used within organizations to acquire, develop, and use power and other resources to obtain one's preferred outcomes in a situation in which there is uncertainty or disagreement about choices.