Question: Bruno 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 $445,500. 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 $102,290 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 0 decimal places, e.g. 10. 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 should not be accepted.