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

Question:

Lovitz 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 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...