Use two decimals for the below question Cheyenne Corporation is evaluating aproposal to acquire a new equipment. Theequipment would require an investment of$417,860.00, including freight and installationcost of $20,000.00. It expected to have a 10-year life with no salvage value at the end of itslife.It has been estimated that the newequipment would increase the company'scash inflows, net of expenses and incometaxes by $68,000.00The company is subject to the 32% income taxrate. Its cost of capital is 8%.The equipment's internal rate of return (IRR) is

Internal rate of return is at which the NPV becomes zero.

Answered: Use two decimals for the below question

Business

Finance

Use two decimals for the below question

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

Problem 1PS

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Question

Use two decimals for the below question

Cheyenne Corporation is evaluating a
proposal to acquire a new equipment. The
equipment would require an investment of
$417,860.00, including freight and installation
cost of $20,000.00. It expected to have a 10-
year life with no salvage value at the end of its
life.
It has been estimated that the new
equipment would increase the company's
cash inflows, net of expenses and income
taxes by $68,000.00
The company is subject to the 32% income tax
rate. Its cost of capital is 8%.
The equipment's internal rate of return (IRR) is

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