A machine costing $850,000 will return $250,000 in the first five years, and $400,000 in the remaining five years. The cost to remove the machine at the end of year ten will be $100,000. The machine will require servicing at the end of years three and six costing $400,000 and $500,000 respectively. What is the IRR of the machine? Should a company purchase the machine if their cost of capital is 13%?

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The Answer of A machine costing $850,000 will return $250,000 in the first five years, and $400,000 in the remaining five years. The cost to remove the machine at the end of year ten will be $100,000. The machine will require servicing at the end of years three and six costing $400,000 and $500,000 respectively. What is the IRR of the machine? Should a company purchase the machine if their cost of capital is 13%?

A Machine Costing $850,000 Will Return $250,000 in the First