question 3

Garrett Boone, Blue Spruce Enterprises vice president of operations, needs to replace an automatic lathe on the production line. The model he is considering has a sales price of $285,352 and will last for 7 years. It will have no salvage value at the end of its useful life. Garrett estimates the new lathe will reduce raw materials scrap by $36,800 per year. He also believes the lathe will reduce energy costs by $28,500 per year. If he purchases the new lathe, he will be able to sell the old lathe for $5,326. Click here to view the factor table. (a) Calculate the lathe's internal rate of return. Internal rate of return $