Considering purchasing new production tool

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Reference no: EM132028786

You are considering purchasing a new production tool that will cost $50,000 to purchase today. Once in use, the tool is anticipated to provide $1850 in positive benefit each year for the next ten years from reduced product defects and material scrap. The tool has a useful life of 10 years and at the end of this time has a salvage value that is 12% of the initial investment. If the MARR for this scenario is 10%, should you invest in the tool? Include in your answer the IRR for this project.

Reference no: EM132028786

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