Sunday, February 10, 2013

The Zeron Corporation recently purchased a new machine for its factory operations at a cost of $921,250

ACCOUNTING

Multiple Choice

The Zeron Corporation recently purchased a new machine for its factory operations at a cost of $921,250. The investment is expected to generate $250,000 in annual cash flows for a period of six years. The required rate of return is 14%. The old machine has a remaining life of six years. The new machine is expected to have zero value at the end of the six-year period. The disposal value of the old machine at the time of replacement is zero. What is the internal rate of return?

a. 15%

b. 16%

c. 17%

d. 18%

Click here for the SOLUTION

No comments:

Post a Comment