Delicate Pieces inc is considering the purchase of a special blow-molding machine that would cost $42.569 and would have a useful life of 5 years. The machine would generate $12.400 of net annual cash infows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to

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
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Delicate Pieces inc. is considering the purchase of a special blow-molding machine that would cost $42,569 and would have a useful life of 5 years. The machine would generate $12.400 of net annual
cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to
Present Value of $1
Periods
3
4
5
6
7
0
0
10
Present Value of Annuity of $1
0%
Periods
3
4
5
6
7
8
9
10
6%
0.840
0.792
0.747
0.705
0.665
0.627
0.592
0.558
OA 6%
OB. 14%
OC. 10 %
OD. 12 %
2673
3.465
4.212
4.917
5.582
0210
6.802
7.360
8%
0.794
0.735
0681
0.630
0.583
0.540
0.500
0.463
8%
2.577
3.312
3.993
4.623
5.206
5.747
6247
6.710
10%
0.751
0.683
0.621
0.564
0.513
0.467
0.424
0,386
10%
2.487
3.170
3.791
4.355
4.868
5.335
5.759
6.145
12%
0.712
0636
0.567
0.507
0.452
0404
0.361
0.322
12%
2.402
3.037
3.605
4.111
4.564
4.968
5.328
5.650
0.675
0.592
0.519
0.450
0.400
0.351
0.308
0.270
2.322
2.914
3.433
3.889
4.288
4.639
4.946
5.216
Transcribed Image Text:Delicate Pieces inc. is considering the purchase of a special blow-molding machine that would cost $42,569 and would have a useful life of 5 years. The machine would generate $12.400 of net annual cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to Present Value of $1 Periods 3 4 5 6 7 0 0 10 Present Value of Annuity of $1 0% Periods 3 4 5 6 7 8 9 10 6% 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 OA 6% OB. 14% OC. 10 % OD. 12 % 2673 3.465 4.212 4.917 5.582 0210 6.802 7.360 8% 0.794 0.735 0681 0.630 0.583 0.540 0.500 0.463 8% 2.577 3.312 3.993 4.623 5.206 5.747 6247 6.710 10% 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0,386 10% 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 12% 0.712 0636 0.567 0.507 0.452 0404 0.361 0.322 12% 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 0.675 0.592 0.519 0.450 0.400 0.351 0.308 0.270 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216
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