You are the owner of Pink Fluffy Bunnies Incorporated. You currently produce a line of small...
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You are the owner of Pink Fluffy Bunnies Incorporated. You currently produce a line of small pink fluffy bunnies and are considering expanding production to include a line of large pink fluffy bunnies. It would mean an equipment upgrade to the tune of $70,000 and you project an additional annual revenue of $20,000. Assuming a five-year run, determine whether you should take on the project if your expected rate of return is (a) 10%, (b) 15%. Use linear interpolation to find the IRR. 10 marks You are the owner of Pink Fluffy Bunnies Incorporated. You currently produce a line of small pink fluffy bunnies and are considering expanding production to include a line of large pink fluffy bunnies. It would mean an equipment upgrade to the tune of $70,000 and you project an additional annual revenue of $20,000. Assuming a five-year run, determine whether you should take on the project if your expected rate of return is (a) 10%, (b) 15%. Use linear interpolation to find the IRR. 10 marks
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Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date:
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