Vaughn Corporation is involved in the business of injection moulding of plastics. It is considering the purchase of a new computer- aided design and manufacturing machine for $426,600. The company believes that with this new machine it will improve productivity and increase quality, resulting in a $115,400 increase in net annual cash flows for the next five years. Management requires a 13% rate of return on all new investments. Click here to view the factor table. Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, e.g. 10%. For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.52124.) Internal rate of return Should management accept the investment? The investment be accepted. %

Vaughn Corporation is involved in the business of injection moulding of plastics. It is considering the purchase of a new computer- aided design and manufacturing machine for $426,600. The company believes that with this new machine it will improve productivity and increase quality, resulting in a $115,400 increase in net annual cash flows for the next five years. Management requires a 13% rate of return on all new investments. Click here to view the factor table. Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, e.g. 10%. For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.52124.) Internal rate of return Should management accept the investment? The investment be accepted. %

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...

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