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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)    % 
 

 


 



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Quinn Industries is considering the purchase of a machine that would cost.docx

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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