Pronghorn Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $58,880 and will save the company $8,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to O decimal place, eg. 15.) Internal rate of return 9 % (b) If Pronghorn uses a 8% hurdle rate, should the company invest in the machine? No
Pronghorn Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $58,880 and will save the company $8,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to O decimal place, eg. 15.) Internal rate of return 9 % (b) If Pronghorn uses a 8% hurdle rate, should the company invest in the machine? No
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...
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