Motel corporation is analyzing a capital expenditure that will involve a cash outlay of $208,240. estimated cash flows are expected to be $40,000 annually for 7 years. the present value factors for an annuity of $1 for 7 years at interest of 6%, 8%, 10%, and 12% are 5.582, 5.206, 4.868, and 4.564, respectively. the internal rate of return for this investment is
a. 12%
b. 6%
c. 8%
d. 10%

The answer is c.8%.

Explanation:

The internal rate of return is the rate of an investment where the cash outlay and the actual value of the cash flows are the same, so the return is eqaul to zero. The actual value of the cash flow are calculated: annual cash flow multiplied by an annuity of $1 at a selected interest. So, the result has to be equal to the outlay (208,240). In this case, x is the annuity.

The annuity of 5.206 is obtained with the interest of 8%.

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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