Blossom Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer- aided design and manufacturing machine for $420,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $102,155 for the next 6 years. Management requires a 10% rate of return on all new investments. Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return % Should the investment be accepted?

Blossom Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer- aided design and manufacturing machine for $420,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $102,155 for the next 6 years. Management requires a 10% rate of return on all new investments. Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return % Should the investment be accepted?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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