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Model (C) Model (X) Model (Y) Initial Cost $7,500 $10,000 $12,500 Life (years) 4 4 4 Annual Savings $2,500 $2,750 $7,000 Calculate the Internal Rate

Model (C)

Model (X)

Model (Y)

Initial Cost

$7,500

$10,000

$12,500

Life (years)

4

4

4

Annual Savings

$2,500

$2,750

$7,000

  1. Calculate the Internal Rate of Return for purchasing Model C
    1. IRRC < 10%
    2. 10%< IRRC < 20%
    3. 20%< IRRC < 30%
    4. Cant calculate it since the future worth of the project is unknown
    5. Equals MARR

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