Diamond Manufacturing Company provides glassware machines for major department store retailers. The company has been investigating a new piece of machinery for its production department. The old equipment has a remaining life of eight years and the new equipment will cost $141,969 with a eight-year life. The expected additional cash inflows are $37,000 per year. What is the internal rate of return?

Question

Quizplus · Accepted Answer

$141,969 = $37,000F
F = 3.837
Chart criteria for 8 years is 3.837 = 20%

Diamond Manufacturing Company Provides Glassware Machines for Major Department Store