Subject: BudgetingInternal rate of rotumSeved%HelpSave & Exit SubmitExercise 24-20A (Algo) IRR for investment using Excel LO P4OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000per year in direct labor costs. The company requires a 11% return from its investments.Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.)Check my work Exercise 24-22A (Algo) Using Excel to compute IRR LO P4Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa, Thecompany requires a 10% return from its investments.Initial investmentNet cash flows in:Year 1Year 2Year 3Year 4Year 5PoolSpaIRRPoolSpa$ (169,000) $ (114,000)%40,90056,90081,19591,30065,900Compute the internal rate of return for each of the projects using excel functions. (Round your answers to 2 decimalplaces.)32,90050,90066,90072,90024,90012 of 13Next

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Description: Subject: BudgetingInternal rate of rotumSeved%HelpSave & Exit SubmitExercise 24-20A (Algo) IRR for investment using Excel LO P4OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5mil

Internal Rate of Return is the rate of return where present value of cash inflows is equal to…

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OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000 per year in direct labor costs. The company requires a 11% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.)

OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000 per year in direct labor costs. The company requires a 11% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 21BEA

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