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How calculate net present value and internal rate of return

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Reference no: EM132611403

Green Lab plans to purchase a new centrifuge machine for its Florida facility. The machine costs $567,000 and is expected to have a useful life of 8 ?years, with a terminal disposal value of $54,000. Savings in cash operating costs are expected to be $108,000 per year.? However, additional working capital is needed to keep the machine running efficiently. The working capital must continually be? replaced, so an investment of $38,000 needs to be maintained at all? times, but this investment is fully recoverable? (will be? "cashed in") at the end of the useful life. Green Lab?'s required rate of return is 8?%. Ignore income taxes in your analysis. Assume all cash flows occur at? year-end except for initial investment amounts. Green Lab uses? straight-line depreciation for its machines.

Question 1: Calculate net present value

Question 2: Calculate internal rate of return

Reference no: EM132611403

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