What is the irr of project-the mitec inc

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The Mitec Inc. is planning to purchase a new production machine. The startup cost of purchasing and installing the machine is $1,000,000. The machine will generate revenue of $500,000 each year for the next 10 years, and all costs including costs of raw materials, labor, utilities, and taxes are $300,000 per year. The machine will require maintenance at the end of every two years, costing $100,000 each time. At the end of the ten years, the company needs to spend $50,000 to divest the machine. The cost of capital for this project is 6%.

What is the IRR of this project?

A.9.4183%
B.7.2654%
C.9.6548%
D.12.5642%
E.8.9446%
F.12.8096%

Reference no: EM132596460

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