100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Assume Research In Motion invested $834 million to expand its man $7.27   Add to cart
Quickly navigate to
Preview
  2.  
  3. HBO Small Business En Ondernemerschap
  4.  
  5. HBO Small Business en Ondernemerschap

Exam (elaborations)

Assume Research In Motion invested $834 million to expand its man
 4 views  0 purchase
  • Course
  • HBO Small Business en Ondernemerschap
  • Institution
  • HBO Small Business En Ondernemerschap

Assume Research In Motion invested $834 million to expand its manufacturing capacity. Assume that these assets have a seven-year life, and that Research In Motion requires a 12% internal rate of return on these assets. Required 1. What is the amount of annual cash flows that Research In M...

[Show more]

Preview 1 out of 2  pages

Document information

  • June 27, 2023
  • 2
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

Subjects

  • assume research
  • research motion
  • motion invested
  • invested 834
  • 834 million
  • million expand
  • expand its
  • its man

Written for

  • HBO Small Business en Ondernemerschap
All documents for this subject (263)

Seller

avatar-seller
meejuhaszjasmynspe52866

Content preview

Assume Research In Motion invested $834 million to expand its manufacturing capacity.
Assume that these assets have a seven-year life, and that Research In Motion requires a 12%
internal rate of return on these assets.



Required 1. What is the amount of annual cash flows that Research In Motion must earn from
these projects to have a 12% internal rate of return? (Hint: Identify the seven-period, 12% factor
from the present value of an annuity table, and then divide $834 million by this factor to get the
annual cash flows necessary.) please answer correctly and go step by step if possible!
Assume Research In Motion invested $834 million to expand its manufacturing capacity.
Assume that these assets have a seven-year life, and that Research In Motion requires a 12%
internal rate of return on these assets.



Required 1. What is the amount of annual cash flows that Research In Motion must earn from
these projects to have a 12% internal rate of return? (Hint: Identify the seven-period, 12% factor
from the present value of an annuity table, and then divide $834 million by this factor to get the
annual cash flows necessary.) please answer correctly and go step by step if possible!


Solution


Hi,



Please find the answer as follows:



At IRR, NPV = 0. Therefore, the value of initial investment should be equal to the sum of cash
inflows earned over the life of the project.



To calculate the Annual Cash Flow, we can use the following equation.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller meejuhaszjasmynspe52866. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.27. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

85443 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$7.27
  • (0)
  Add to cart