Question
Elgin Restaurant Supplies is analyzing the purchase of a manufacturing machine that will cost $20,000. The annual cash inflows are as follows. Year Cash Flow
Elgin Restaurant Supplies is analyzing the purchase of a manufacturing machine that will cost $20,000. The annual cash inflows are as follows.
Year | Cash Flow |
1 | $10,000 |
2 | 9,000 |
3 | 6,500 |
a. Determine the IRR.
b. With a cost of capital of 12 percent, should the manufacturing machine be purchased?
c. With information from part b, compute the PI.
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
