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Adams Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the companys cash outflow for operating expenses by $1,275,000 per

Adams Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the companys cash outflow for operating expenses by $1,275,000 per year. The cost of the equipment is $8,555,353.28. Adams expects it to have a 10-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

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  1. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.)

  2. Indicate whether the investment opportunity should be accepted.

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