Reduce the company cash outflow for operating expenses

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Reference no: EM131296377

Merton Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company’s cash outflow for operating expenses by $1,289,000 per year. The cost of the equipment is $8,372,133.63. Merton expects it to have a 11-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Required

Calculate the internal rate of return of the investment opportunity.

Reference no: EM131296377

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Reduce the company cash outflow for operating expenses : Merton Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company’s cash outflow for operating expenses by $1,289,000 per year. The cost of the equipment is $8,372,133.63. Calculate the i..

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