In: Accounting
Larson Company is considering the purchase of a machine with the following characteristics:
Initial cost |
$16,000 |
Useful life of the machine |
6 years |
Required rate of return (discount rate) |
12% |
Reduction in annual net cash outflows |
$4,120 |
Residual value (at end of useful life) |
$0 |
Calculate the IRR (internal rate of return) for this machine (investment opportunity).
14%
16%
18%
12%