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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Internal Rate of Return Analysis. Architect Services, Inc., would like to purchase a blueprint machine for $50,000. The machine is expected to have a life of 4 years, and a salvage value of $10,000. Annual maintenance costs will total $14,000. Annual savings are predicted to be $30,000. The company’s required rate of return is 11 percent (this is the same data as the previous exercise).
Required:
a. Use trial and error to approximate the internal rate of return for this investment proposal. Round to the nearest dollar.
b. Should the company purchase the blueprint machine? Explain.
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