Adelaide Machine Company is evaluating a capital expenditure proposal that requires an initial investment of $83 840 and has predicted cash inflows of $20 000 per year for 10 years.It will have no salvage value.
Required:
a.Using a required rate of return of 16%,determine the net present value of the investment proposal.
b.Determine the proposal's internal rate of return.
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Question

Quizplus · Accepted Answer

The Answer of Adelaide Machine Company is evaluating a capital expenditure proposal that requires an initial investment of $83 840 and has predicted cash inflows of $20 000 per year for 10 years.It will have no salvage value.
Required:
a.Using a required rate of return of 16%,determine the net present value of the investment proposal.
b.Determine the proposal's internal rate of return.
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Adelaide Machine Company Is Evaluating a Capital Expenditure Proposal That