OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $4 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $500,000 per year in direct labor costs. The company requires a 10% 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. 15.40 - Internal rate of return

Essentials Of Investments
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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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OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $4 million, has a
20-year life, and will have zero salvage value. If the system is implemented, the company will save $500,000 per year in direct labor
costs. The company requires a 10% 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.
15.40
internal rate of return
Hotum
Transcribed Image Text:2 OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $4 million, has a 20-year life, and will have zero salvage value. If the system is implemented, the company will save $500,000 per year in direct labor costs. The company requires a 10% 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. 15.40 internal rate of return Hotum
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