Ivanhoe Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided design and manufacturing machine for $426,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $112,565 for the next 6 years. Management requires a 10% rate of return on all new investments. Click here to view PV table. Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return Should the investment be accepted? The investment ✓ be accepted. % 13
Ivanhoe Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided design and manufacturing machine for $426,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $112,565 for the next 6 years. Management requires a 10% rate of return on all new investments. Click here to view PV table. Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Internal rate of return Should the investment be accepted? The investment ✓ be accepted. % 13
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 18EA: Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and...
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Question
A6
![Ivanhoe Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided
design and manufacturing machine for $426,000. The company believes that with this new machine it will improve productivity and
increase quality, resulting in an increase in net annual cash flows of $112,565 for the next 6 years. Management requires a 10% rate of
return on all new investments. Click here to view PV table.
Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5
decimal places as displayed in the factor table provided.)
Internal rate of return
Should the investment be accepted?
The investment
✓ be accepted.
%
13](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F69744c11-af2d-4046-bb95-b62d28d30c49%2Ffdd2f4e6-67cd-4c30-b9ec-6a5bd14a5f80%2F3hqdzda_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ivanhoe Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided
design and manufacturing machine for $426,000. The company believes that with this new machine it will improve productivity and
increase quality, resulting in an increase in net annual cash flows of $112,565 for the next 6 years. Management requires a 10% rate of
return on all new investments. Click here to view PV table.
Calculate the internal rate of return on this new machine. (Round answer to O decimal places, e.g. 13%. For calculation purposes, use 5
decimal places as displayed in the factor table provided.)
Internal rate of return
Should the investment be accepted?
The investment
✓ be accepted.
%
13
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