Soda Manufacturing Company provides vending machines for soft-drink manufacturers.The company has been investigating a new piece of machinery for its production department.The old equipment has a remaining life of four years and the new equipment has a value of $91,110 with a four-year life.The expected additional cash inflows are $30,000 per year.What is the internal rate of return?
A) 12%
B) 16%
C) 10%
D) 8%

Question

Quizplus · Accepted Answer

The internal rate of return is 12% because the net present value of the project is $0 at that discount rate.

Soda Manufacturing Company Provides Vending Machines for Soft-Drink Manufacturers