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Determine the irr using interpolation

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Question - Elgin Restaurant Supplies is analyzing the purchase of manufacturing equipment that will cost $30,000. The annual cash inflows are as follows.

Year Cash Flow

16000

14500

11500

a) Determine the IRR using interpolation

b) With a cost of capital at 18% should the company make this investment? Note: compute the NPV c) Compute the profitability index (PI).

Reference no: EM132920868

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