IRR = 23.58%

This the answer show how he did it step by step please( 6-12)

187 sive investment alternatives are illustrated in the exclust teemative is not feasible. The cash flows are shown for a 10-year pe MARR is 12%. Determine the preferred alternative, using (a) the e "- m noth ethod. (b) the ERR method CF(B) CFIC CF(D) CRA) -$ 50.000-$125.00-$200,000-510000 + 50,000150,000 75,000 85,000 90,000 100,000 50,000 70.000 50.000 50.00070.000 75.000 10 75,00070,000 75.000 firm is considering leasing a crane needed on a project for 5 years for able at the beginning of each year. The alternative is to buy a crane now $I 5500 000 and sell it at the end of 5 years for $100.000. Annual for ow tives equivalent? maintenance costs for ssrshio only are expected to be S$15,000 per year for the first 2 years and for the last 3 years. At what interest rate (IRR) are the two alterna- machine costing $5.000 will produce net savings of $2,000 per year +t An une has a 5-year economic life, but must be returned to the factory for major The after 3 years of operation. These repairs will cost $2,500. The company's is 12%. What IRR will be earned on the purchase of this machine? Do you rec- MARR ommend it? 4. An improved facility costing $250,000 has been proposed. Construction time will be 2 years with expenditures of $100.000 the first year and $150,000 the second year. Savings beginning the first year after construction completion are as follows: Year Savings I 30,000 50.000 70,000 90,000 5 110,000 The facility will not be required after 5 years and will have a salvage value of $25,000. Determine 5. and (b) ERR using a reinvestment rate of 10%. g the erection of a bottle-making plant. The number of bottles estimated at 600,000. The initial cost of the facility is S150,000, with f 10 years. Annual operation and maintenance costs are expected to annual taxes and insurance $15,000. Should the distillery erect the bot- acility or buy the bottles from another company at $0.15 each? Use the methods with a minimum attractive rate of 12%. ntemal rate of return on an investment of $2,000 that will yield $528 per ears