Internal Rate of Return Method for a Service CompanyThe Riverton Company, a ski resort, recently announced a $215,352 expansion to lodging properties, lifts, and terrain. Assume that this investment is estimated to produce $72,000 in equal annual cash flows for each of the first five years of the project life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a.Determine the expected internal rate of return of this project for five years, using the present value of an annuity of $1 table above. If required, round your final answer to the nearest whole percent.fill in the blank 1 % b. Indentify the uncertainties that could reduce the internal rate of return of this project?

Internal Rate of Return Method for a Service Company The Riverton Company, a ski resort, recently announced a $215,352 expansion to lodging properties, lifts, and terrain. Assume that this investment...

Internal Rate of Return Method for a Service Company

The Riverton Company, a ski resort, recently announced a $215,352 expansion to lodging properties, lifts, and terrain. Assume that this investment is estimated to produce $72,000 in equal annual cash flows for each of the first five years of the project life.

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.353	2.991
6	4.917	4.355	4.111	3.785	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

a.Determine the expected internal rate of return of this project for five years, using the present value of an annuity of $1 table above. If required, round your final answer to the nearest whole percent.
fill in the blank 1 %

b. Indentify the uncertainties that could reduce the internal rate of return of this project?

Jun 08, 2022

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Internal Rate of Return Method for a Service Company The Riverton Company, a ski resort, recently announced a $215,352 expansion to lodging properties, lifts, and terrain. Assume that this investment...

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