Question
Eisler Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided design and manufacturing machine
Eisler Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided design and manufacturing machine for $450,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $103,323 for the next 6 years. Management requires a 10% rate of return on all new investments.
a. Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, e.g. 10.)
b. Should the investment be accepted?
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