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Mangosteen Corp. is considering investing $850,000 in a new piece of machinery with a 10-year useful life. The salvage value of the equipment is $0.
Mangosteen Corp. is considering investing $850,000 in a new piece of machinery with a 10-year useful life. The salvage value of the equipment is $0. Projected cash flow per year from the investment is $150,000 for 10 years. The required rate of return is 13%. a. (8 points) Show all your calculations and label each item. What is the internal rate of return? (Round to two decimal points.) b. What is the Net Present Value? Based on the Net Present Value calculation, should management of Mangosteen Corp. invest in the new machinery? (Round to a whole number.) What is the Accounting Rate of Return? (Round to two decimal points.) d. What is the payback period? (Round to one decimal point.) C
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