Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. internal rate of return analysis white mountain mi

Internal Rate of Return Analysis White Mountain Mining, LLC is considering the purchase of a...

60.1K

Verified Solution

Question

Accounting

Internal Rate of Return Analysis

White Mountain Mining, LLC is considering the purchase of a new piece of machinery. The initial cost of the machine will be $4,000,000 and the machine will have a useful life of five years. The companys hurdle rate is 8%. The following cash flow projections have been made:

Year 1 $310,000
Year 2 $960,000
Year 3 $1,610,000
Year 4 $1,060,000
Year 5 $610,000

Calculate the internal rate of return for the machinery.

Use Excel to compute your answers.

Round answers to the nearest whole percentage (ex: 0.1854 = 19%)

Answer

%

Should White Mountain purchase the machinery?

No, since the hurdle rate exceeds the internal rate of return.

Yes, since the internal rate of return exceeds the hurdle rate.

PreviousSave AnswersNext

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

1) Explain with halogens are deactivators, but ortho, para directors, instead of m directors, in an...

Civil Engineering
1.2K views

A trapezoidal channel has a bottom width of 3.25 m and sides with a slope of...

Statistics
1.2K views

K est What is the significance of the Choose the correct answer bel O A...

Calculus
1.2K views

aluez 2 Pedz dz avec u avec une erreur inf rieure 10 2

Calculus
1.2K views

The relationship between the Fahrenheit F and Celsius C scales is given by F g...

Calculus
1.2K views

If f x y z 2zy then the gradient at the point 3 2 4...

Algebra
1.2K views

Evaluate fog x 2 f x x 3x g x x 2 fog x

Algebra
1.2K views

pply Logs to both sides of the equation with b 0 and use the properties...

Accounting
1.2K views

Complete parts 1-3. The Adjusting Process 161 Learning Objective 3 3. Office Supplies...

Accounting
1.2K views

Division N has decided to develop its budget based upon projected sales of 41,000 lamps...

Accounting
1.2K views

Eclipse Corp. is considering taking over a contaminated building site on a former mining site....

Accounting
1.2K views

True or False? Partnership Law is different than Agency law because a partnership is not...