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You can purchase a new machine for $15,000. The investment will generate $7,500 and $8,500 in cash flows in year 1 and 2, respectively. The
You can purchase a new machine for $15,000. The investment will generate $7,500 and $8,500 in cash flows in year 1 and 2, respectively. The cost of capital is 5%. What is the IRR on this investment (keep four decimals)? Should you invest in this project according to the IRR evaluation method and why?
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