I don't want the answer... I just have some questions to get me going. Here are the facts:
Cost of the facility: $2,045,000
Useful Life: 12 years
Selling for(after 12yrs): $600,000
Annual Cash Inflow: $400,000
Annual Cash Outflow: $160,000
Calculate the internal rate of return...
The book says you can divide the cost of the facility by the annual cash flow and then take that answer and look at the "present value of an annuity of 1" table under 12 and find the IRR. Is $600,000 my salvage value? Am I adding the salvage value to my cash inflow then subtracting my outflow to get my annual cash flow? I'm not getting any of the numbers in the table using the above info... help! :mad: