Daley Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture

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Daley Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $170,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $33,740. What is its approximate internal rate of return?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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