Henrie’s drapery service is investigating the purchase of a new machine for cleaning and blocking drapes. the machine would cost $113,730, including freight and installation. henrie’s estimated the new machine would increase the company’s cash inflows, net of expenses, by $30,000 per year. the machine would have a five-year useful life and no salvage value.
use exhibit 13b-1 and exhibit 13b-2, to determine the appropriate discount factor(s) using table.
1. what is the machine’s internal rate of return? (round your answer to whole decimal place i. e. 0.123 should be considered as 12%.)
2. using a discount rate of 10%, what is the machine’s net present value? interpret your results.
3. suppose the new machine would increase the company’s annual cash inflows, net of expenses, by only $27,000 per year. under these conditions, what is the internal rate of return? (round your answer to whole decimal place i. e. 0.123 should be considered as 12%.)
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answer; ///(d)///getting your passbook updated when you make a deposit; //////