Measurement Question: An investment of $100,000 promises an after-tax cash flow of $36,000 per year for 6 years with no residual value.
- Find the investment's accounting rate of return.
- Find the investment's payback period.
- Find the investment's net present value at a 15 percent discount rate
- Find the investment's internal rate of return
- Assuming the required rate of return on the investment is 15 percent, would you recommend this investment? Explain your answer using the results from your answers to questions a-d as appropriate.
(1) Accounting Rate of Return = 36% (2) Pay BAck PEriod = 2.78 Years (3) NPV = $ 36,241.38 (4) IRR = 27.70%... View the full answer