Question
A new dough mixing machine will cost a bakery $22,000 and will generate $3,500 revenue per year for 5 years. The salvage value will be
A new dough mixing machine will cost a bakery $22,000 and will generate $3,500 revenue per year for 5 years. The salvage value will be $6,500 after the 5 years. Assume the bakery has a 5% MARR. a) Determine the IRR for the machine. Please use interpolation.
b) Since the operator requires at least 5% return on their investment, should the machine be purchased? Why?
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Finance With Monte Carlo
Authors: Ronald W. Shonkwiler
2013th Edition
146148510X, 978-1461485100
