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Benson Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the companys cash outflow for operating expenses by $1,287,000 per
Benson Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the companys cash outflow for operating expenses by $1,287,000 per year. The cost of the equipment is $6,866,049.76. Benson expects it to have a 8-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 9 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required Calculate the internal rate of return of the investment opportunity. Note: Do not round intermediate calculations. Indicate whether the investment opportunity should be accepted
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