The cost of a new machine is $110,000 and it is expected to reduce the...
90.2K
Verified Solution
Link Copied!
Question
Accounting
The cost of a new machine is $110,000 and it is expected to reduce the labour cost by $30,000 per year. The salvage value of the machine at the end of year six is expected to be $20,000. If the after-tax MARR of the company is 9% and the tax rate is 55% and depreciation rate is 20%: a) Determine the exact after-tax IRR for this investment? b) Determine the approximate after-tax IRR? c) Should the company buy this machine?
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!