Ace Corporation recently purchased a new machine for its factory operations at a cost of $950,000. The investment is expected to generate $250,000 in annual cash flows for a period of five years. The required rate of return is 8%. The new machine is expected to have zero salvage value at the end of the five-year period.
Instructions
Calculate the internal rate of return. (Table 4 from Appendix C is needed.)

Question

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The Answer of Ace Corporation recently purchased a new machine for its factory operations at a cost of $950,000. The investment is expected to generate $250,000 in annual cash flows for a period of five years. The required rate of return is 8%. The new machine is expected to have zero salvage value at the end of the five-year period.
Instructions
Calculate the internal rate of return. (Table 4 from Appendix C is needed.)

Ace Corporation Recently Purchased a New Machine for Its Factory