Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Information Technologies In Accounting And Auditing A Post-Soviet Approach

Authors: Sergiy Ivakhnenkov

1st Edition

3639285395, 978-3639285390

More Books

Students also viewed these Accounting questions