Ivanhoe 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 $426,000. 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 $112,565 for the next 6 years. Management requires a 10% rate of return on all new investments. Click here to view PV table. 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? The investment ✓ be accepted. % 13

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Ivanhoe 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 $426,000. 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 $112,565 for the next 6 years. Management requires a 10% rate of
return on all new investments. Click here to view PV table.
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?
The investment
✓ be accepted.
%
13
Transcribed Image Text:Ivanhoe 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 $426,000. 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 $112,565 for the next 6 years. Management requires a 10% rate of return on all new investments. Click here to view PV table. 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? The investment ✓ be accepted. % 13
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