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XYZ is now evaluating the purchase of a new machine for $210,000 installed with no NWC...

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Finance

XYZ is now evaluating the purchase of a new machine for $210,000installed with no NWC change. They plan to sell the machine at theend of 3 years for $30,000. MACRS 3 year depreciation. With themore efficient machine, labor savings per year are expected to be$70,000, $94,000 and $76,000 respectively. 40% tax. The cost ofcapital for this project is 8.%. What is the IRR?

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