Kings Department Store is contemplating the purchase of a new machine at a cost of...
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Accounting
Kings Department Store is contemplating the purchase of a new machine at a cost of $32,840. The machine will provide $5,500 per year in cash flow for eight years. Kings has a cost of capital of 10 percent. Use Appendix D for an approximate answer but calculate your final answer using the financial calculator method.
a. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. Should the project be undertaken?
| Yes | |
| No |
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