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Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce...

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Accounting

Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the companys cash outflow for operating expenses by $1,275,000 per year. The cost of the equipment is $7,216,872.30. Zachary expects it to have a 12-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1)

Required

Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.)

Indicate whether the investment opportunity should be accepted.

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