What is the decision rule for judging attractiveness

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Bailey inc is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. at the end of its useful life, the punch has no salvage value. Labor costs would increase $2,000 per year using the gang punch but raw material costs would decrease $12,000 per year MARR is 5%/yr.

A. What is the internal rate of return?

B. What is the decision rule for judging attractiveness of investments based on internal rate of return?

(Please show calculations and not excel)

Reference no: EM132022083

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