Park Co. is considering an investment that requires immediate payment of $21,530 and provides expected cash inflows of $6,500 annually for four years. Assume Park Co. requires a 7% return on its investments. What is the internal rate of return?

8.00%

Explanation:

The internal rate of return is the rate of return on the investment which gives a zero net present value.

IRR can be computed using excel IRR function as shown below:

=IRR(values)

values are the cash flows arranged from the earliest( year zero ) to the latest (year 4) as contained in the attached.

IRR=8.00%

The IRR is proven thus:

NPV=-$21,530+$6500/(1+8%)^1+$6500/(1+8%)^2+$6500/(1+8%)^3+$6500/(1+8%)^4=-$1.18(which is very close to zero)

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

answer; the correct answer is (direct foreign investment);