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Welch Corporation is planning an investment with the following characteristics (Ignore income taxes.):
| |
| Useful life | | 6 | years |
| Yearly net cash inflow | $ | 60,000 | |
| Salvage value | $ | 0 | |
| Internal rate of return | | 16 | % |
| Required rate of return | | 12 | % |
| |
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
The initial cost of the equipment is closest to:
A)Cannot be determined from the given information.
B) $221,100
C) $231,450
D) $300,100
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