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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 $163,700, 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 $163,700, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $50,000 per year. The machine would have a five-year useful life and no salvage value cick here to view Exhibit 136-1 and Exhibit 136-2, to determine the appropriate discount factons) using table Required 1. what is the machine's internal rate of return? (Round your answer to whole decimal place i.e. 0.123 should be considered as 12%.) 2 Using a discount rate of 16% what is the machines net present value? interpret your results 3. Suppose the new machine would increase the company's annual cash inftows, net of expenses, by only 341,000 per year. Under these conditions, wnat is the intemal rate of retum? (Round your answer to whole decimal place i.e. 0.123 should be considered as 12%.) 1. Internal rate of return 2 Net present value 3. Internal rate of return
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