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How do I solve this problem? Please provide your work im detail. Exercise 14-15 (Algo) Internal Rate of Return and Net Present Value [LO14-2, LO14-3]
How do I solve this problem? Please provide your work im detail.
Exercise 14-15 (Algo) Internal Rate of Return and Net Present Value [LO14-2, LO14-3] Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $151,410, including freight and installation. Henrie's estimated the new machine would increase the company's cash inflows, net of expenses, by $42.000 per year. The machine would have a five-year useful life and no salvage value. Click here to view and Exhibit 148 2, to determine the approprlate discount factor(s) using table. Required: 1. What is the machine's intemal rate of return? (Round your answer to the nearest whole percentoge, i.e. 0.123 should be considered os 12%. 2. Using a discount rate of 12%, what is the machine's net present value? Interpret your results. 3. Suppose the new machine would increase the company's annual cash inflows, net of expenses, by only $36.930 per year. Under these conditions, what is the internal rate of return? (Round your answer to the nearest whole percentoge, i.e. 0.123 should be considered as 12% ) EXTHETT 14H-1 Prevent Valee of 51: -1 r11(1+r)n1 Step by Step Solution
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