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A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually O a. IRR=3% semiannual O b. IRR=6% semiannual Oc. IRR=12% semiannual Od. IRR=6.02% semiannual

A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually O a. IRR=3% semiannual O b. IRR=6% semiannual Oc. IRR=12% semiannual Od. IRR=6.02% semiannual

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 6E
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A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually O a. IRR=3% semiannual O b. IRR=6% semiannual Oc. IRR=12% semiannual Od. IRR=6.02% semiannual
Transcribed Image Text:A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually O a. IRR=3% semiannual O b. IRR=6% semiannual Oc. IRR=12% semiannual Od. IRR=6.02% semiannual
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