Tanya Sinclair, owner of Sinclair Fine Wine, is considering investing $192,489 i

Question

Tanya Sinclair, owner of Sinclair Fine Wine, is considering investing $192,489 in a temperature-controlled wine storage room. She plans to rent space to customers and expects to generate $40,112 annually (rental charges less miscellaneous expenses other than depreciation).

Assuming Tanya wishes to evaluate the project with a 8-year time horizon, what is the internal rate of return of the investment? (Ignore taxes.) (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answer to 1 decimal place, e.g. 12.5%.)

Tanya Sinclair, owner of Sinclair Fine Wine, is considering investing $192,489 in a temperature-controlled wine storage room. She plans to rent space to customers and expects to generate $40,112 annually (rental charges less miscellaneous expenses other than depreciation).

Explanation / Answer

Tanya Sinclair, owner of Sinclair Fine Wine, is considering investing $192,489 i

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