Oriole 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 $424,000. 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 $106,065 for the next 6 years. Management requires a 10% rate of return on all new investments. Click here to view the factor table. Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, eg. 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 should be accepted. 13 %
Oriole 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 $424,000. 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 $106,065 for the next 6 years. Management requires a 10% rate of return on all new investments. Click here to view the factor table. Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, eg. 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 should be accepted. 13 %
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Oriole 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 $424,000. 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 $106,065 for the next 6 years. Management requires a 10% rate of
return on all new investments. Click here to view the factor table.
Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, eg. 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 should
eTextbook and Media
Ce frul ste
be accepted..
13
%
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