(Ignore income taxes in this problem.) The management of Erion Corporation is considering the purchase of an automated molding machine that would cost $280,534, would have a useful life of 5 years, and would have no salvage value. The automated molding machine would result in cash savings of $74,000 per year due to lower labor and other costs.
Required:
Determine the internal rate of return on the investment in the new automated molding machine. Show your work!

Question

Quizplus · Accepted Answer

The Answer of (Ignore income taxes in this problem.) The management of Erion Corporation is considering the purchase of an automated molding machine that would cost $280,534, would have a useful life of 5 years, and would have no salvage value. The automated molding machine would result in cash savings of $74,000 per year due to lower labor and other costs.
Required:
Determine the internal rate of return on the investment in the new automated molding machine. Show your work!

(Ignore Income Taxes in This Problem