Internal Rate of Return Method The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $37,345 and annual...

Internal Rate of Return Method

The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $37,345 and annual net cash flows of $7,000 for each of the eight years of its useful life.

a.Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return. If required, round your answer to three decimal places.
fill in the blank 1

b.Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal rate of return for the proposal.
fill in the blank 2 %