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Optilux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5 million, hat 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000 per year in direct labor costs. The company requires a 11% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Internal rate of return 11.45

Optilux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5 million, hat 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000 per year in direct labor costs. The company requires a 11% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Internal rate of return 11.45

FINANCIAL ACCOUNTING
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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Exercise 24-20A (Algo) IRR for investment using Excel LO P4 OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000 per year in direct labor costs. The company requires a 11% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. % Internal rate of return 11.45
Transcribed Image Text:Exercise 24-20A (Algo) IRR for investment using Excel LO P4 OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $6.5 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $880,000 per year in direct labor costs. The company requires a 11% return from its investments. Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. % Internal rate of return 11.45
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