90.2K

Verified Solution

Link Copied!

Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company's cash outflow for operating expenses by $1,279,000 per year. The cost of the equipment is $9.130,734.96. Zachary expects it to have a 11-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the stralght-line method for depreciation. (PV of \$1 and PVA of Si) (Use appropriate factor(s) from the tables provided.) Required o. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate colculations.) b. Indicate whether the investment opportunity should be accepted. Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company's cash outflow for operating expenses by $1,279,000 per year. The cost of the equipment is $9.130,734.96. Zachary expects it to have a 11-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the stralght-line method for depreciation. (PV of \$1 and PVA of Si) (Use appropriate factor(s) from the tables provided.) Required o. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate colculations.) b. Indicate whether the investment opportunity should be accepted

Answer & Explanation Solved by verified expert

See Answer