(Present value tables are required.) Renfroe Corporation is considering the purchase of a machine that would cost $22,712 and would have a useful life of 5 years
The machine would generate $6,300 of net annual cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to
A) 8%.
B) 10%.
C) 12%.
D) 14%.
C
Explanation: C)
Costs $22,712/6,300 net cash flow = 3.605
Closest FVA = >12.00%
Business
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