Blossom Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer- aided design and manufacturing machine for $420,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $102,155 for the next 6 years. Management requires a 10% rate of return on all new investments. Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return % Should the investment be accepted?
Blossom Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer- aided design and manufacturing machine for $420,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $102,155 for the next 6 years. Management requires a 10% rate of return on all new investments. Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return % Should the investment be accepted?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...
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