Question
The management of QMW Corporation is considering the purchase of a new machine costing $242,550. This new asset will generate an annual net cash flow
The management of QMW Corporation is considering the purchase of a new machine costing $242,550. This new asset will generate an annual net cash flow of $70,000 for the next 4 years. What is the Internal Rate of Return for this investment, given the following info: Use the following data to help determine the answer:
Table for the Present Value of $1 at compound interest:
Year 6.0% 10.0% 12.0%
1 .943 .909 .893
2 .890 .826 .797
3 .840 .751 .712
4 .792 .683 .636
5 .747 .621 .567
Table for the Present Value of an annuity of $1 at compound interest:
Year 6.0% 10.0% 12.0%
1 .943 .909 .893
2 1.833 1.736 1.690
3 2.673 2.487 2.402
4 3.465 3.170 3.037
5 4.212 3.791 3.605
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