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Ch.12 Review Assignments 4 Seved 10 Doints eBook Print to Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and
Ch.12 Review Assignments 4 Seved 10 Doints eBook Print to Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $126.175, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $35,000 per year. The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 128-1 and Exhibit 128-2 to determine the appropriate discount factor(s) using table Required: 1. What is the machine's internal rate of return? (Round your answer to the nearest whole percentage, Le. 0.123 should be considered as 12%) 2. Using a discount rate of 12%, what is the machine's net present value? Interpret your results. 3. Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $32,435 per year. Under these conditions, what is the internal rate of return? (Round your answer to the nearest whole percentage, L.e. 0.123 should be considered as 12%) 1. Internal rate of retur % References 2. Net present value 3. Internal rate of returni %
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