Compute the machine internal rate of return

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Gordon Corporation is considering the acquisition of a new machine that costs $149,040. The machine is expected to have a four-year service life and will produce annual savings in cash operating costs of $45,000. Gordon evaluates investments by using the internal rate of return and ignores income taxes.

Problem 1: Compute the machine's internal rate of return. Give your answer in decimal form. Hint: be sure you give the interest rate not the factor.

Reference no: EM132958488

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