Question
A structural failure diagnostic kit can be purchased at a total cost of $ 80,000. Based on a fixed annual production rate for the next
A structural failure diagnostic kit can be purchased at a total cost of $ 80,000. Based on a fixed annual production rate for the next 15 years, and an estimate of an annual net income of $ 11,746 derived from the application of this inspection method, as well as a null market liquidation value at the end of the 15 years , determine (a) the value of the expected Internal Rate of Return for this project, and (b) if in fact, the equipment became obsolete at the end of the sixth year, and was sold for $ 20,000, what was the value of the Real Internal Rate of Return of the project?
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