Axel Corporaton is planning to buy a new machine with the expectation that this investment should earn

Question:

Axel Corporaton is planning to buy a new machine with the expectation that this investment should earn a rate of return of at least 15%. This machine, which costs $150,000, would yield an estimated net cash flow of $30,000 per year for 10 years.

REQUIRED
A. What is the net present value for this proposal?
B. What is the internal rate of return for this proposal?

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...
Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Cost Management Measuring Monitoring And Motivating Performance

ISBN: 392

2nd Edition

Authors: Leslie G. Eldenburg, Susan K. Wolcott

Question Posted: