ABC Company is considering the purchase of a new piece of equipment costing $138,875.The equipment has a 7-year useful life and is expected to generate $24,000 in annual cost savings.ABC has a 4% required rate of return.
Required:
a.What is the internal rate of return for the equipment round to nearest factor
b.Should ABC purchase the new equipment? Why or Why not?
Unit 9-3,

Question

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The Answer of ABC Company is considering the purchase of a new piece of equipment costing $138,875.The equipment has a 7-year useful life and is expected to generate $24,000 in annual cost savings.ABC has a 4% required rate of return.
Required:
a.What is the internal rate of return for the equipment round to nearest factor
b.Should ABC purchase the new equipment? Why or Why not?
Unit 9-3,

ABC Company Is Considering the Purchase of a New Piece