Question: A new dough mixing machine will cost Carlo's bakery $23,000 and will generate $4,000 revenue per year for 5 years. The salvage value will be $4, 500 after the 5 years. Assume the bakery has a 5% MARR.
a. Determine the IRR for the machine. Please use interpolation.
b. Since Buddy wants at least a 5% return on his investments, should the machine be purchased? Why?