West Coast Manufacturing Ltd.is considering buying an automated machine that costs $250,000.It requires working capital of $5,000.Annual cash savings are anticipated to be $55,000 for five years.The company uses straight-line depreciation.The salvage value at the end of five years is expected to be $10,000.The working capital will be recovered at the end of the machine's life.Required:
1.Compute the accrual accounting rate of return based on the initial investment.2.Compute the internal rate of return.

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The Answer of West Coast Manufacturing Ltd.is considering buying an automated machine that costs $250,000.It requires working capital of $5,000.Annual cash savings are anticipated to be $55,000 for five years.The company uses straight-line depreciation.The salvage value at the end of five years is expected to be $10,000.The working capital will be recovered at the end of the machine's life.Required:
1.Compute the accrual accounting rate of return based on the initial investment.2.Compute the internal rate of return.