The Enor Machine Company is evaluating a capital expenditure proposal that requires an initial investment of $99,360 and has predicted cash inflows of $20,000 per year for 8 years. It will have no salvage value.
Required:
a.Using a required rate of return of 10%, determine the net present value of the investment proposal.
b.Determine the proposal's internal rate of return.

Question

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The Answer of The Enor Machine Company is evaluating a capital expenditure proposal that requires an initial investment of $99,360 and has predicted cash inflows of $20,000 per year for 8 years. It will have no salvage value.
Required:
a.Using a required rate of return of 10%, determine the net present value of the investment proposal.
b.Determine the proposal's internal rate of return.

The Enor Machine Company Is Evaluating a Capital Expenditure Proposal