Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $50,000. The annual cash

Question:

Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $50,000. The annual cash inflows for the next three years will be:
YearCash Flow
1 ......... $25,000
2 ......... 23,000
3 ......... 18,000
a. Determine the internal rate of return.
b. With a of 18 percent, should the machine be purchased?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...