Question
Company is considering the purchase of a new piece of machinery. Initial cost is $4000000 and a useful life of five years. Company hurdle rate
Company is considering the purchase of a new piece of machinery. Initial cost is $4000000 and a useful life of five years. Company hurdle rate is 8%. Following cash flow projections have been made:
Year 1 $310,000 Year 2 $960,000 Year 3 $1,610,000 Year 4 $1,060.000 Year 5 $610.000 Calculate the internal rate of return for the machinery. Use Excel to compute your answers. Round answers to the nearest whole percentage (ex: 0.1854 = 1996) 96 Should White Mountain purchase the machinery?
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Management and Cost Accounting
Authors: Colin Drury
10th edition
1473748873, 9781473748910 , 1473748917, 978-1473748873
