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# Quinn Industries is considering the purchase of a machine that would cost \$420,000 and would last for 8 years.

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 Quinn Industries is considering the purchase of a machine that would cost \$420,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of \$92,500. The machine would reduce labor and other costs by \$88,000 per year. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes.)

Required:

Compute the net present value of the project by inputting the variables that are entered into your calculator / Excel.  (If a variable is not used in the calculation, input a zero (0).  Omit the "\$" and "%" signs in your response.)  Round your answer to the nearest dollar and use a minus sign for negative numbers.

Excel / calculator input:

 Interest Rate (Rate, I, I/YR) %
 Nper, N
 PMT \$
 PV \$
 FV \$

 Net Present Value (NPV) \$

 Required: Compute the internal rate of return of the project by inputting the variables that are entered into your calculator / Excel.  (If a variable is not used in the calculation, input a zero (0).  Omit the "\$" and "%" signs in your response.)  Round your answer to one decimal place and use a minus sign for negative numbers.

Excel / calculator input:

 Interest Rate (Rate, I, I/YR) %

 Nper, N

 PMT \$

 PV \$

 FV \$

 Internal Rate of Return (IRR) %  Sign up to view the entire interaction

Great question... View the full answer Quinn Industries is considering the purchase of a machine that would cost \$420,000 and
would last for 8 years. At the end of 8 years, the machine would have a salvage value of
\$92,500. Interest...

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