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Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of Voor 1 Machine A R800 000 4 years 0 R200 000 12% R20 000 Machine B R800 000 4 years 0 R200 000 12% R80 000

Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of Voor 1 Machine A R800 000 4 years 0 R200 000 12% R20 000 Machine B R800 000 4 years 0 R200 000 12% R80 000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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show the Internal Rate of Return of Machine B (expressed to two decimal places) using interpolation if the net cash flows are R290 000 per year for four years.

Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 000 4 years 0 R200 000 12% R20 000 R60 000 R140 000 R120 000 Machine B R800 000 4 years 0 R200 000 12% R80 000 R80 000 R80 000 R80 000
Transcribed Image Text:Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of return Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 000 4 years 0 R200 000 12% R20 000 R60 000 R140 000 R120 000 Machine B R800 000 4 years 0 R200 000 12% R80 000 R80 000 R80 000 R80 000
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