What is the machines internal rate of return

Reference no: EM131901948

Problem

Leven Rehabilitation Center, a training service, is investigating the purchase of a new energy-efficient cold coffee bottling machine that has a projected life of 15 years. It is estimated that the machine will save $20,000 per year in cash operating costs.

1. What is the machine's internal rate of return if it costs $111,500 new?

2. Is the machine an acceptable investment? Explain.

3. What risks should be included?

Complete the questions using Microsoft Excel and submit.

Reference no: EM131901948

Questions Cloud

What is meant by the cost of living : Long-term liabilities are items that are due in one year or more such as education loans or mortgages.

Create a fictional character that is based on your identity : Create a fictional character that is based on some aspect of your identity - historical, cultural, gender, interests. Once you have developed your character

What does the given statment mean : Yme Inc. is a small retail chain with 5 branches in Ohio. Recently Yme Inc. has been facing many inventory related problems such as over ordering of certain.

How much tax will he pay on the dividend he received : Assuming Guy's marginal ordinary tax rate is 35%, how much tax will he pay on the dividend he received from Marathon Inc.

What is the machines internal rate of return : What is the machine's internal rate of return if it costs $111,500 new? Is the machine an acceptable investment? Explain. What risks should be included?

What happens to the equilibrium price if demand increases : Suppose a Market is in equilibrium in both the man and supply curves increase. What happens to the equilibrium price if demand increases more than supply

Why is capital budgeting analysis so important to the firm : How the cost of capital is determined in segmented vs. integrated capital markets? explain in detail also give example.

Life easier on millions of people : Jobs are disappearing, bonuses are shrinking and raises will be hard to come by. But the drop in prices, which isn't over yet, will make life easier

Prepare the journal entries that richie company would make : Prepare the journal entries that Richie Company would make in the first year of the lease assuming the lease is classified as a direct financing lease.

User Account

All Pages