Author Question: Locil Corporation recently purchased a new machine for $307,890 with a eight-year life. The old ... (Read 82 times)

Kikoku · **on:** Mar 6, 2021

Question 1

Investment A requires a net investment of $604,021 The required rate of return is 12% for the three-year annuity. What are the annual cash inflows if the net present value equals 0? (rounded)
◦ $2,416,084
◦ $251,466
◦ $604,016
◦ -$1,812,063

Question 2

Locil Corporation recently purchased a new machine for $307,890 with a eight-year life. The old equipment has a remaining life of eight years and no disposal value at the time of replacement. Net cash flows will be $90,000 per year. What is the internal rate of return?
◦ 24%
◦ 29%
◦ 33%
◦ 37%

mtmmmmmk · **Reply #1 on:** Mar 6, 2021

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