Question

Machine A costs $850,000 and would produce cash flows of $220,000 per year for the first two years, $350,000 per year for the next two years, and $150,000 in the final year. Machine B costs $650,000 and would produce cash flows of $250,000 per year for the first two years, $200,000 the following year, $150,000 in its fourth year, and $140,000 in its final year. Your required return is 11%. What is the IRR of buying machine A?

Answer 1

Answer:

The answer is "15.61%"

Explanation:

Please find the solution file in the attachment.