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MLF Corporation is evaluating the purchase of a P500,000 die attach machine.  The cash inflows expected from the investment is P145,000 per year for five years with no equipment salvage value.  The cost of capital is 12%.  The net present value factor for five (5) years at 12% is 3.6048 and at 14% is 3.4331.  The internal rate of return for this investment is a. 3.45% b. 2.04% c. 13.8% d. 15.48%

MLF Corporation is evaluating the purchase of a P500,000 die attach machine.  The cash inflows expected from the investment is P145,000 per year for five years with no equipment salvage value.  The cost of capital is 12%.  The net present value factor for five (5) years at 12% is 3.6048 and at 14% is 3.4331.  The internal rate of return for this investment is a. 3.45% b. 2.04% c. 13.8% d. 15.48%

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...
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MLF Corporation is evaluating the purchase of a P500,000 die attach machine.  The cash inflows expected from the investment is P145,000 per year for five years with no equipment salvage value.  The cost of capital is 12%.  The net present value factor for five (5) years at 12% is 3.6048 and at 14% is 3.4331.  The internal rate of return for this investment is

a. 3.45%

b. 2.04%

c. 13.8%

d. 15.48%

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