The Comil Corporation recently purchased a new machine for its factory operations at a cost of $328,325. The investment is expected to generate $115,000 in annual cash flows for a period of four years. The required rate of return is 13%. The old machine has a remaining life of four years. The new machine is expected to have zero value at the end of the four-year period. The disposal value of the old machine at the time of replacement is zero. What is the internal rate of return?
A) 12%
B) 13%
C) 14%
D) 15%

Question

Quizplus · Accepted Answer

$328,325 = $115,000F
F = 2.855
Chart criteria for four years is 2.855 = 15%

The Comil Corporation Recently Purchased a New Machine for Its