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Internal Rate of Return Manzer Enterprises is considering two independent investments: A new automated materials handling system that costs $ 9 0 0 , 0
Internal Rate of Return
Manzer Enterprises is considering two independent investments:
A new automated materials handling system that costs $ and will produce net cash inflows of $ at the end of each year for the next four years.
A computeraided manufacturing system that costs $ and will produce labor savings of $ and $ at the end of the first year and second year, respectively.
Manzer has a cost of capital of percent.
The present value tables provided in Exhibit B and Exhibit B must be used to solve the following problems.
Required:
Calculate the IRR for the first investment. Enter your answers as whole percentage values for example, should be entered as in the answer box
Between and
Determine if it is acceptable or not.
Calculate the IRR of the second investment. Use percent as the first guess. Enter your answers as whole percentage values for example, should be entered as in the answer box
Between and
Comment on its acceptability.
What if the cash flows for the first investment are $ instead of $ Give your answer to the nearest whole percent.
The IRR would be about Unacceptable investment
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