Chapter 9 Question 6Please help me with this question- Its my last try! Pronghorn Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machineunder consideration costs $58,880 and will save the company $8,000 in direct labor costs. It is expected to last 10 years.Click here to view the factor table.(a) Calculate the internal rate of return on the weaving machine. (Round answer to O decimal place, eg. 15.)Internal rate of return9 %(b) If Pronghorn uses a 8% hurdle rate, should the company invest in the machine?No APPENDIX 9.2 Present value of an annuity of $1 per period.Periods4%5%6%7%8%9%10%11%12%13%14%16%18%20%1.0.96150.95240.94340.93460.92590.91740.90910.90090.89290.88500.87720.86210.84750.83331.88611.85941.83341.80801.78331.75911.73551.71251.69011.66811.64671.60521.56561.52782.77512.72322.67302.6243 2.5771 2.53132.48682.44372.40182.36122.32162.24592.17432.106543.62993.54603.46513.3872 3.3121 3.23973.16983.1024 3.03732.97452.91372.79822.69012.58874.45184.32954.21244.1002 3.9927 3.88973.79073.69593.60483.51723.43313.27433.12722.99065.24215.07574.91734.7665 4.62294.48594.35534.23054.11143.99753.88873.68473.49763.325576.00215.78645.58245.3893 5.20645.03304.86844.71224.56384.42264.28834.03863.81153.60468.6.73276.46326.20985.9713 5.7466 5.53485.33495.14614.96764.79884.63894.34364.07763.83729.7.43537.10786.80176.5152 6.2469 5.99525.75905.53705.32825.1317 4.94644.6065 4.3030 4.0310108.11097.7217 7.36017.0236 6.710i 6.41776.14465.88925.65025.4262 5.2161 4.8332 4.49414.1925118.76058.30647.88697.49877.13906.80526.49516.20655.93775.68695.45275.02864.65604.3271129.38518.86338.38387.9427 7.5361 7.16076.81376.4924 6.19445.91765.6603 5.1971 4.7932 4.4392139.98569.39368.85278.3577 7.9038 7.4869 7.10346.74996.42356.12185.8424 5.3423 4.9095 4.53271410.56319.89869.29508.74558.24427.78627.36676.98196.62826.30256.00215.4675 5.00814.61061511.1184 10.37979.71229.1079 8.5595 8.06077.60617.19096.81096.46246.14225.57555.09164.67551611.6523 10.8378 10.10599.4466 8.8514 8.31267.82377.37926.97406.60396.26515.66855.16244.72961712.1657 11.2741 10.47739.7632 9.1216 8.54368.02167.54887.11966.72916.37295.74875.22234.77461812.659311.6896 10.8276 10.05919.37198.75568.20147.70167.24976,83996.46745.81785.27324.81221913.133912.0853 11.1581 10.3356 9.6036 8.95018.36497.83937.36586.93806.55045.87755.31624.84352013.590312.4622 11.4699 10.5940 9.8181 9.12858.51367.96337.46947.02486.62315.92885.35274.86961(1+ i)"PVA nii

Discount factor = Initial investment / Annual savings = $58880/8000 = 7.3600

Pronghorn Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $58,880 and will save the company $8,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to O decimal place, eg. 15.) Internal rate of return 9 % (b) If Pronghorn uses a 8% hurdle rate, should the company invest in the machine? No

Pronghorn Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $58,880 and will save the company $8,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to O decimal place, eg. 15.) Internal rate of return 9 % (b) If Pronghorn uses a 8% hurdle rate, should the company invest in the machine? No

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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