Henrie s Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes.
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Question:
Henries Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $ including freight and installation. Henries estimated the new machine would increase the companys cash inflows, net of expenses, by $ per year. The machine would have a fiveyear useful life and no salvage value.
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using table.
Required:
What is the machines internal rate of return? Round your answer to the nearest whole percentage, ie should be considered as
Using a discount rate of what is the machines net present value? Interpret your results.
Suppose the new machine would increase the companys annual cash inflows, net of expenses, by only $ per year. Under these conditions, what is the internal rate of return? Round your answer to the nearest whole percentage, ie should be considered as
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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