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In: Finance
Elgin Restaurant Supplies is analyzing the purchase of manufacturing equipment that will cost $41,000. The annual...
Elgin Restaurant Supplies is analyzing the purchase of manufacturing equipment that will cost $41,000. The annual cash inflows are as follows. Use Appendix D.
| Year | Cash Flow | |||
| 1 | $20,000 | |||
| 2 | 19,000 | |||
| 3 | 16,500 | |||
a. Determine the IRR using interpolation. (Round the intermediate calculations to the nearest whole dollar. Round the final answer to 2 decimal places.)
IRR %
b. With a cost of capital of 16 percent, should the machine be purchased?
-
Yes
-
No
c. With information from part b, compute the PI. (Round the final answer to 3 decimal places.)
PI
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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