Question
Own The Ice is evaluating the purchase of a new zamboni that costs $690,000, will have a CCA rate of 20%, an estimated useful life
Own The Ice is evaluating the purchase of a new zamboni that costs $690,000, will have a CCA rate of 20%, an estimated useful life of 10 years and a zero terminal disposal price.The company's marginal tax rate is 32%.It is estimated that the zamboni will create the most amazing ice surface, attracting significant additional arena rentals and therefore increase annual before tax profits by $155,000.
The net present value of this investment using a 12% after tax rate of return is $36,141.Based on this information, calculate the internal rate of return to two decimal places using interpolation.
Would it be possible for you to show the answers in Excel with the functions? I'm using this to prep myself for a test but I don't know how to go about doing it.
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