The management of Mesquite Limited is currently evaluating the following investment proposal:
|
Time 0
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Initial Investment
|
$240,000
|
-
|
-
|
-
|
-
|
Net operating
|
|
|
|
|
|
Cash inflows
|
-
|
$100,000
|
$100,000
|
$100,000
|
$100,000
|
- Determine the proposal's payback period
- Determine the proposal's internal rate of return
- Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 14 percent. Round to the nearest dollar