1. A bakery is considering investing in a new oven. The oven has a cost of $14,000 and is expected to generate additional profits of $2,000 per year over its 10-year lifespan. At the end of 10 years, the oven will have no salvage value. Within what range of interest rates does the Internal Rate of Return (IRR) for this investment fall? Circle your answer and show your work. You do not have to solve for the exact interest rate. 1% 5 6 78 9 10 11 a) Less than 6% b) 6% to 8% c) 8% to 10% d) Greater than 10% (P/A, 1%, 10) 7.72 7.36 7.02 6.71 6.42 6.14 5.89

1. A bakery is considering investing in a new oven. The oven has a cost of $14,000 and is expected to generate additional profits of $2,000 per year over its 10-year lifespan. At the end of 10 years, the oven will have no salvage value. Within what range of interest rates does the Internal Rate of Return (IRR) for this investment fall? Circle your answer and show your work. You do not have to solve for the exact interest rate. 1% 5 6 78 9 10 11 a) Less than 6% b) 6% to 8% c) 8% to 10% d) Greater than 10% (P/A, 1%, 10) 7.72 7.36 7.02 6.71 6.42 6.14 5.89

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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