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. 37.5 % 25.0 % 10.5 % 13.5 %

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Webber Corporation is considering an investment in a labor-saving machine

Accounting Mar 15, 2021

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.

1. 1. 37.5 %
  2. 25.0 %
  3. 10.5 %
  4. 13.5 %

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