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Compute the Investment's Internal Rate of return. Enter as a percent. If required, round your answer to the nearest whole percent. IRR =  %

Compute the Investment's Internal Rate of return. Enter as a percent. If required, round your answer to the nearest whole percent. IRR =  %

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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412

Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below.

Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $654,842. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:

Year      Cash Revenues      Cash Expenses
1 $1,200,000 $1,000,000
2 1,200,000 1,000,000
3 1,200,000 1,000,000
4 1,200,000 1,000,000
5 1,200,000 1,000,000

Required:

Compute the Investment's Internal Rate of return. Enter as a percent. If required, round your answer to the nearest whole percent.
IRR =  %

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