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NPV and IRR:
Unequal Annual Net Cash Inflows
Salt River Company is evaluating a capital expenditure proposal that has the following predicted cash flows:
Initial investment \$55,190
Operation
Year 1 30,000
Year 2 20,000
Year 3 20,000
Salvage 0
(a) Using a discount rate of 12 percent, determine the net present value of the investment proposal. (Round to the nearest whole number.)
\$0
(b) Determine the proposal's internal rate of return. (Refer to Appendix 24B if you use the table approach.) Hint: You will need to use a trial-and-error approach. (Ro
percentage)
14\%