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Question 6 A machine can reduce annual cost by $40,000. The cost of the machine is 223,000 and the useful life is 15 years with

Question 6

A machine can reduce annual cost by $40,000. The cost of the machine is 223,000 and the useful life is 15 years with zero residual value.

Required:

Compute internal rate of return of the machine.
Is it an acceptable investment if cost of capital is 16%?

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