Vino Winery is considering the purchase of a state-of-the-art bottling machine. The new machine will cost $34,840 and will have a useful life of 6 years. The new machine will provide net cash savings of $8,000 per year. What is the internal rate of return (IRR) for the new bottling machine? |(Click the icon to view the present value of $1 table.) (Click the icon to view the present value of annuity of $1 table.) A. 6% B. 14% C. 12% D. 10% Present Value of $1 Periods 6% 0.840 12% 0.712 3 10% 0.751 0.683 0.621 14% 0.675 0.592 4 0.636 5 6 8% 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.519 0.456 0.400 7 0.567 0.507 0.452 0.404 0.361 0.322 0.564 0.513 0.467 0.424 0.386 8 0.351 9 0.308 0.270 10 8% 10% 2.487 3.170 3.791 Present Value of Annuity of $1 Periods 6% 3 2.673 4 3.465 5 4.212 6 4.917 7 5.582 8 6.210 9 6.802 10 7.360 2.577 3.312 3.993 4.623 5.206 5.747 6.247 12% 2.402 3.037 3.605 4.111 4.564 4.968 5.328 4.355 4.868 5.335 5.759 6.145 14% 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 6.710 5.650