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You buy a new piece of equipment for $30,978, and you receive a cash inflow of $3,900 per year for 12 years. Use Appendix D for an approximate answer but calculate your final answer using the financial calculator method. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Respuesta :

Answer:

x = 7%

Explanation:

given data:

price of equipment is given as $30 978

cash inflow is given a $3900/ year for a period of 12 years

Let internal rate of return is x %

we know , at IRR, inflow value of PV = outflow value of PV

[tex]30978 = \frac{3900}{1 \times x} + \frac{3900}{1 \times x^2} + \frac{3900}{1 \times x^3} +....+ \frac{3900}{1 \times x^{12}}[/tex]

from using financial calculator x value will be

x = 7%

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