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Question 7 Your rm is evaluating whether to invest in a machine that costs $300,000. With the machine, your rm projects a net cash inow
Question 7 Your rm is evaluating whether to invest in a machine that costs $300,000. With the machine, your rm projects a net cash inow of $60,000 at the end of every year for the next 7 years. At the end of the 7 years, your rm will scrap the machine and do not expect to receive any salvage value for it. Calculate the internal rate of return of this investment. Given the cost of capital for the rm is 3%, should your rm purchase the machine? Explain your reason(s). (4 marks)
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