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Homework answers / question archive / Webber Corporation is considering an investment in a labor-saving machine
Webber Corporation is considering an investment in a labor-saving machine. Information on this machine follows:
|
Cost |
$30,000 |
|
Salvage value in five years |
$0 |
|
Estimated life |
5 years |
|
Annual depreciation |
$6,000 |
|
Annual reduction in existing costs |
$8,000 |
Refer to Webber Corporation. What is the internal rate of return on this project (round to the nearest 1/2%)? Present value tables or a financial calculator are required.
