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Excaliber is considering the acquisition of a $217,750 machine that is expected to produce...

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Question

Accounting

Excaliber is considering the acquisition of a
$217,750 machine that is expected to produce
annual savings in cash operating costs of $50,000
over the next six years. If Excaliber uses the internal
rate of return (IRR) to evaluate new investments and
the company has a hurdle rate of 12%, which of the
following statements is correct, using the tables
that follow?
The machine's IRR is less than 4%, and the machine
should not be acquired
The machine's IRR is approximately 10%, and the
machine should not be acquired
The machine's IRR is approximately 10%, and the
machine should be acquired
The machine's IRR is approximately 12%, and the
machine should be acquired
All of the statements are false
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