QUESTION
94. Industrial Services is analyzing a proposed investment that would initially require $538, 000 of new equipment. This
Category: Business
Subject: Finance
Due Date: 02/03/2016
Question Asked: 2016-02-03 03:18:50
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94. Industrial Services is analyzing a
proposed investment that would initially require $538, 000 of new equipment.
This equipment would be depreciated on a straight-line basis to a zero balance
over the 4-year life of the project. The estimated salvage value is $187,000.
The project requires $39,000 initially for net working capital, all of which
will be recouped at the end of the project. The projected operating cash flow
is $194,900 a year. What is the internal rate of return on this project if the
relevant tax rate is 34 percent?
A. 15.54 percent
B. 15.92 percent
C. 18.01 percent
D. 18.67 percent
E. 20.49 percent
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94. Industrial Services is analyzing a proposed investment that would initially require $538, 000 of new equipment. This
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... balance over the 4-year life of the project. The estimated salvage value is $187,000. The project requires $39,000 initially ...
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