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Question 4 10 marks Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost R130,400
Question 4 10 marks Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost R130,400 including freight and installation. Henries has estimated that the new machine would increase the company's cash inflows, net of expenses, by R25,000 per year. The machine would have a 10-year useful life and no salvage value. REQUIRED (lgnore income taxes.) 4.1 Compute the machine's internal rate of return to the nearest whole percent. 4.2 Compute the machine's net present value. Use a discount rate of 14%. Why do you have a zero net present value? Suppose that the new machine would increase the company's annual cash inflows, net of expenses, by only R22,500 per year. Under these conditions, compute the internal rate of retum to the nearest whole percent. 4.3
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