What is the IRR for Machine D over a 4-year project life with thefollowing details:Machine D$375,000Initial costLife in years41Salvage after life35%Benefits 1st year$178,000Costs 1st year$114,200Inflation5.50%All benefits keep increasing every year6.50%even when a new machine is bought.5.3%3.8%8.1%O 7.4%

The rate of return (IRR) is a research and consulting metric used to assess the profitability of…

What is the IRR for Machine D over a 4-year project life with the following details: Machine D Initial cost Life in years Salvage after life Benefits 1st year Costs 1st year Inflation All benefits keep increasing every year even when a new machine is bought. O 5.3% O 3.8% O 8.1% O 7.4% $375,000 41 35% $178,000 $114,200 5.50% 6.50%

What is the IRR for Machine D over a 4-year project life with the following details: Machine D Initial cost Life in years Salvage after life Benefits 1st year Costs 1st year Inflation All benefits keep increasing every year even when a new machine is bought. O 5.3% O 3.8% O 8.1% O 7.4% $375,000 41 35% $178,000 $114,200 5.50% 6.50%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

What is the IRR for Machine D over a 4-year project life with the
following details:
Machine D
$375,000
Initial cost
Life in years
41
Salvage after life
35%
Benefits 1st year
$178,000
Costs 1st year
$114,200
Inflation
5.50%
All benefits keep increasing every year
6.50%
even when a new machine is bought.
5.3%
3.8%
8.1%
O 7.4%

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