(Ignore income taxes in this problem.)Boxton Corporation's required rate of return is 12%.The company is considering the purchase of a new machine that will save $20,000 per year in cash operating costs.The machine will cost $128,360 and will have a 10-year useful life with zero salvage value.Straight-line depreciation will be used.
Required:
Compute the machine's internal rate of return.Would you recommend purchase of the machine? Explain.

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The Answer of (Ignore income taxes in this problem.)Boxton Corporation's required rate of return is 12%.The company is considering the purchase of a new machine that will save $20,000 per year in cash operating costs.The machine will cost $128,360 and will have a 10-year useful life with zero salvage value.Straight-line depreciation will be used.
Required:
Compute the machine's internal rate of return.Would you recommend purchase of the machine? Explain.

(Ignore Income Taxes in This Problem