Calculate the lathe internal rate of return

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Question - Garrett Boone, Sheffield Enterprises' vice president of operations, needs to replace an automatic lathe on the production line. The model he is considering has a sales price of $347,379and will last for 15 years. It will have no salvage value at the end of its useful life. Garrett estimates the new lathe will reduce raw materials scrap by $37,000per year. He also believes the lathe will reduce energy costs by $3,000per year. If he purchases the new lathe, he will be able to sell the old lathe for $5,000. Calculate the lathe's internal rate of return.

Reference no: EM133100042

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