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Own The Ice is evaluating the purchase of a new zamboni that costs $980,000, will...

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Accounting

Own The Ice is evaluating the purchase of a new zamboni that costs $980,000, will have a CCA rate of 20%, an estimated useful life of 10 years and a zero terminal disposal price. The companys marginal tax rate is 32%. It is estimated that the zamboni will create the most amazing ice surface, attracting significant additional arena rentals and therefore increase annual before tax profits by $200,000.
The net present value of this investment using a 10% after tax rate of return is $74,230.82. Based on this information, calculate the internal rate of return to two decimal places using interpolation.
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