Applecross Dental Services is investigating expanding its operations by acquiring additional teeth cleaning equipment. The equipment...

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Applecross Dental Services is investigating expanding its operations by acquiring additional teeth cleaning equipment. The equipment would cost $155,000 and management has estimated that it would result in net cash inflows of $15,200 per year. The equipment would have a 15-year useful life with an expected salvage value of $15,700. (Ignore income taxes.) Required: 1. Compute the equipment's IRR. (Hint: Use Microsoft Excel to calculate the discount factor(s).) (Do not round intermediate calculations and round your final answer to 1 decimal place.) Internal rate of return % 2-a. Assume that instead of $15,200, the salvage value in 15 years for the new equipment will be $0. Compute the IRR under this new assumption. (Do not round intermediate calculations and round your final answer to 1 decimal place.) Internal rate of return % 2-b. This part of the question is not part of your Connect assignment. Applecross Dental Services is investigating expanding its operations by acquiring additional teeth cleaning equipment. The equipment would cost $155,000 and management has estimated that it would result in net cash inflows of $15,200 per year. The equipment would have a 15-year useful life with an expected salvage value of $15,700. (Ignore income taxes.) Required: 1. Compute the equipment's IRR. (Hint: Use Microsoft Excel to calculate the discount factor(s).) (Do not round intermediate calculations and round your final answer to 1 decimal place.) Internal rate of return % 2-a. Assume that instead of $15,200, the salvage value in 15 years for the new equipment will be $0. Compute the IRR under this new assumption. (Do not round intermediate calculations and round your final answer to 1 decimal place.) Internal rate of return % 2-b. This part of the question is not part of your Connect assignment.

Answer rating: 100% (QA)

Answer Lets start by calculating the Internal Rate of Return IRR for the equipment under the given a... View the full answer