70.2K
Verified Solution
Link Copied!
Target wants to know if it should use its current equipment or replace it with new equipment.
The following information is available for current and new equipment:
Old equipment sales value $12,000
Final sales value for old equipment $2,630
Operating costs $63,240
New equipment Purchase cost $162,000
Final sales value $2,630
Operating cost savings $32,450
The current and new equipment will last for 6 years. If Target replaces the current equipment, what is the approximate internal rate of return?
Answer & Explanation
Solved by verified expert
