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Internal Rate of Return Method The internal rate of retum method is used by Testerman...

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Accounting

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Internal Rate of Return Method The internal rate of retum method is used by Testerman Construction C0, in analying a capital expenditure proposal that involves an investment of s45, 200 and annual net cash thows of $8,000 for each of the 10 years of its useful life. Present Value of an Annuitv of $1 at Comnnund Tateres. a. Determine a present value foctor for an annuity of $1 which can be used in determining the internal rate of return, If required, round your answer to three decimal places. b. Using the foctor determined in part (a) and the present vaiue of an annuity of $1 table above, determine the internal rate of return for the proposal. \%

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