What is the rate of return for this machine

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A new machine can be purchased today for $100,000. The annual extra revenue from the machine is calculated to be $30,000, and the equipment will last 10 years. Expect the maintenance and operating costs to be $2,000 in Year 1 and to increase $500 per year after Year 1. The salvage value of the machine will be $10,000 at the end of Year 10. (a) What is the rate of return for this machine? (b) Do you want to purchase this machine if MARR required by the company is 15%?

Reference no: EM131346391

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