ordon Corporation is considering the acquisition of a new machine that costs $149,040. The machine is expected to have a four-year service life and will produce annual savings in cash operating costs of $45,000. Gordon evaluates investments by using the internal rate of return and ignores income taxes. Compute the machine's internal rate of return. Give your answer in decimal form.
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ordon Corporation is considering the acquisition of a new machine that costs $149,040. The machine is expected to have a four-year service life and will produce annual savings in cash operating costs of $45,000. Gordon evaluates investments by using the
Compute the machine's internal rate of return. Give your answer in decimal form.
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- Cullumber Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $162,000, has an estimated useful life of 7 years and a salvage value of zero, and will increase net annual cash flows by $33,280. Click here to view the factor table. What is its approximate internal rate of return? (Round answer to 0 decimal place, e.g. 13%.) Internal rate of returnSheffield Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $170,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $32,652. Click here to view PV table. What is its approximate internal rate of return? (Round answer to O decimal place, e.g. 13%.) Internal rate of return % doMcKnight Co. is considering acquiring a manufacturing plant. The purchase price is $1,100,000. The owners believe the plant will generate net cash inflows of $325,000 annually. It will have to be replaced in seven years. Use the payback method to determine whether McKnight should purchase this plant. Round to one decimal place. Select the formula, then enter the amounts to calculate the payback period for the plant. (Round payback to one decimal place, X.X.) = Payback + = The payback occurs the plant must be replaced, so the payback method purchasing the plant. ne 41 1 2 Q A exactly when well after well before (a 2 W S #t * 3 LU E D $ 4 % 5 R T FIL 40 6 W & years hp 7 Y H G 8 J ( 9 K fio ► 11 O BUD P [ . 4 pause L ? enter og up
- Dobson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income of $59,000. The equipment will have an initial cost of $507,000 and have an seven year life. There is no salvage value of the equipment. The hurdle rate is 14%. Ignore income taxes. a. Calculate accounting rate of return. (Round your answer to 2 decimal places.) Rate of Return b. Calculate payback period (Round your answer to one decimal place.) Years Payback PeriodSmith Co. is considering acquiring a manufacturing plant. The purchase price is $1,250,000. The owners believe the plant will generate net cash inflows of $307,000 annually. It will have to be replaced in seven years. Use the payback method to determine whether Smith should purchase this plant. Round to one decimal place. Select the formula, then enter the amounts to calculate the payback period for the plant. (Round payback to one decimal place, X.X.) Payback The payback occurs the plant must be replaced, so the payback method years purchasing the plant.Hypore Darby Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $348,400. The annual cost savings if the new machine is acquired will be $80,000. The machine will have a 6-year life, at which time the terminal disposal value is expected to be zero. Hypore Park Department is assuming no tax consequences. What is the internal rate of return for Hypore Park Department? Question 6 options: 11% 9% 5% 10%