Determining annual cost savings

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Reference no: EM13127794

Joe Flubup is the president of Flubup, Inc. He is considering buying a new machine that would cost $25,470. Joe has determined that the new machine promises an internal rate of return of 14%, but Joe has misplaced the paper which tells the annual cost savings promised by the new machine. He does remember that the machine has a projected life of 12 years. Based on these data, the annual cost savings are:

A. It is impossible to determine from the given data.

B. $2,122.50

C. $4,500.00

D. $4,650.00

Reference no: EM13127794

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