Machine internal rate of return

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Reference no: EM13137986

Ernie has shopped for machines and found that the machine he wants will cost $131,000. In addition, Ernie estimates that the new machine will increase the company's annual net cash inflows by $21,200. The machine will have a 12-year useful life and no salvage value. Instructions (a) Calculate the cash payback period. (b) Calculate the machine's internal rate of return. (c) Calculate the machine's net present value using a discount rate of 10%.

Reference no: EM13137986

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