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Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $56,000. The annual cash inflows for the next three years will be:
Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $56,000. The annual cash inflows for the next three years will be:
Year | Cash Flow |
---|---|
1 | $ 28,000 |
2 | 26,000 |
3 | 21,000 |
Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method.
Determine the internal rate of return.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
With a cost of capital of 18 percent, should the equipment be purchased?
- multiple choice
No
Yes
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