Assume Polaris invested $ 2.12 million to expand its manufacturing capacity. Assume that these assets have a ten year life, and that Polaris requires a 10% internal rate of return on these assets.
Required:
What is the amount of annual cash flows that Polaris must earn from these projects to have a 10% internal rate of return? (Identify the ten period, 10% factor from the present value of an annuity table, and then divide $ 2.12 million by this factor to get the annual cash flows necessary.)