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Calculate the internal rate of return on the weaving machine

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Reference no: EM132999511

Question - Need to determine the internal rate of return percentage - Novak Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $86,500 and will save the company $13,000 in direct labor costs. It is expected to last 10 years.

Required -

(a) Calculate the internal rate of return on the weaving machine.

(b) If Novak uses a 10% hurdle rate, should the company invest in the machine?

Reference no: EM132999511

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