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Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost S102,990, including freight and installation.
Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost S102,990, including freight and installation. Henrie's has estimated that the new machine would increase the company's cash inflows, net of expenses, by S30,000 per year The machine would have a five-year useful life and no salvage value. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table Required 1. Compute the machine's internal rate of return to the nearest whole percent. nternal Rate of Return choose Numerator: Choose Denominator: Factor Number of Years Internal Rate of Return Factor 2. Compute the machine's net present value. U a discount rate of 14%. (Any cash outflows should be se indicated by a minus sign. Round discount factor(s) to 3 decimal places Purchase of machine Annual cash inflows Total cash flows Discount factor (14%) Present value Net present value
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