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 $150,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $1,000 per year using the gang punch, but raw material costs would decrease $14,500 per year. MARR is 5%/year. Part a What is the internal rate of return of this investment? % Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2. Save for Later Part b Attempts: 0 of 3 used Submit Answer

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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 $150,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would
increase $1,000 per year using the gang punch, but raw material costs would decrease $14,500 per year. MARR is 5%/year.
Part a
What is the internal rate of return of this investment?
%
Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.
Save for Later
Part b
Attempts: 0 of 3 used Submit Answer
Transcribed Image Text: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 $150,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $1,000 per year using the gang punch, but raw material costs would decrease $14,500 per year. MARR is 5%/year. Part a What is the internal rate of return of this investment? % Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2. Save for Later Part b Attempts: 0 of 3 used Submit Answer
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