Omicron Company is considering purchasing equipment that would cost $60,000 and have a useful life of 5 years.The equipment is expected to provide net cash inflows of $16,000 per year.Omicron's cost of capital is 12%.
Required:
Estimate the internal rate of return for this capital investment.Is this an acceptable investment?

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The Answer of Omicron Company is considering purchasing equipment that would cost $60,000 and have a useful life of 5 years.The equipment is expected to provide net cash inflows of $16,000 per year.Omicron's cost of capital is 12%.
Required:
Estimate the internal rate of return for this capital investment.Is this an acceptable investment?

Omicron Company Is Considering Purchasing Equipment That Would Cost $60,000