Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
5
What is the IRR for Machine D over a 4-year project life with the
following details:
Machine D
$375,000
Initial cost
Life in years
Salvage after life
Benefits 1st year
Costs 1st year
4
35%
$178,000
$114,200
Inflation
All benefits keep increasing every year
even when a new machine is bought.
5.50%
6.50%
O 5.3%
3.8%
O 8.1%
O 7.4%
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Transcribed Image Text:What is the IRR for Machine D over a 4-year project life with the following details: Machine D $375,000 Initial cost Life in years Salvage after life Benefits 1st year Costs 1st year 4 35% $178,000 $114,200 Inflation All benefits keep increasing every year even when a new machine is bought. 5.50% 6.50% O 5.3% 3.8% O 8.1% O 7.4%
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