Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the...

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Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the...

Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the following investment proposal: Time 0 Year 1 Year 2 Year 3 Year 4 Initial investment $270,000 -- -- -- -- Net operating cash inflows -- $100,000 $100,000 $100,000 $100,000

( (Round answer to one decimal place.))

(a) Determine the proposal's payback period.

Answer 2.7 years Correct

(b) Determine the proposal's internal rate of return. (Refer to Appendix 12B if you use the table approach.) Round answer to the nearest percentage (ex: 0.18567 = 19%)

Answer 17.81 % Correct

(c) Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 8 percent. Round the answer to the nearest dollar.

$ Answer

Please help me solve Part C.

business accounting

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Answer 1

Answer #1

The answer has been presented to the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

A C. E F G Н 1 Answer 2 3 Part C) 4 Minimum annual cash inflow intial investment/Present value annuity (8%,4) 5270000/((1-(1.

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Answer 2

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