ome Security Systems is analyzing the purchase of manufacturing equipment that will cost $50,000. The...
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Accounting
ome Security Systems is analyzing the purchase of manufacturing equipment that will cost $50,000. The annual cash inflows for the next three years will be:
| Year | Cash Flow |
| 1 | $25,000 |
| 2 | 23,000 |
| 3 | 18,000 |
A.) Determine the internal rate of return using interpolation.
B.) With a cost of capital of 18 percent, should the machine be purchased?
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