Juno Manufacturing Ltd. is considering replacing its existing equipment with an automated machine for $133,950. Juno depreciates
Question:
Juno Manufacturing Ltd. is considering replacing its existing equipment with an automated machine for $133,950. Juno depreciates its capital assets using the straight-line depreciation method. Juno estimates that the new machine will reduce production costs by $28,500 per year and that it has a useful life of 6 years. What is the internal rate of return?
a. 6.84%
b. 7.46%
c. 7.66%
d. 8.14%
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