Machine based on its internal rate of return

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Reference no: EM132045074

The World Dictionary needs to purchase a new printing machine costing $1.8 million. Management is estimating that the machine will generate cash inflows of either $200,000 or $300,000 with equal probability for three years and either $300,000 or $400,000 with equal probability for the following four years. If management requires a minimum 15% rate of return, should they purchase this particular machine based on its internal rate of return? Why or why not?

Reference no: EM132045074

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