Kendra Corporation is involved in the business of injection moulding of plastics. It is considering the purchase

Question:

Kendra is involved in the business of injection moulding of plastics. It is considering the purchase of a new computer-aided design and manufacturing machine for $430,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in a $101,000 increase in net annual cash flows for the next five years. Management requires a 10% rate of return on all new investments.
Instructions
Calculate the on this new machine. Should management accept the investment?
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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...