Assume Polaris invested $2.12 million to expand its
manufacturing capacity.Assume that
these projects have a ten-year life and that management requires a 10% internal
rate of return on these assets.
What is the amount of annual cash flows that
Polaris must earn from these projects to have a 10% internal rate of
return? (Hint: Identify the ten-period,
10% factor from the present value of an annuity table, and then divide $2.12
million by the factor to get the annual required cash flows.)
Assess Polarisâ€™s most recent annual financial
statements, from its website (polaris.com) or the SECâ€™s website (sec.gov).
Determine the amount that Polaris invested in
capital assets for that year.
(Hint: Refer to the statement of
Assume a ten-year life and a 10% internal rate
of return. What is the amount of cash
flows that Polaris must earn on these new projects?
There are no reviews yet.