Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $170,595. 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 $170,595. including freight and installation. Henrie's has estimated that the new machine would increase the company's cash inflows, net of expenses, by $45,000 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: Compute the machine's internal rate of return to the nearest whole percent. Compute the machine's net present value. Use a discount rate of 10%. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.) Suppose that the new machine would increase the company's annual cash inflows, net of expenses, by only $40,500 per year. Under these conditions, the internal rate of return to the nearest whole percent
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started