The Comil Corporation recently purchased a new machine for its factory operations at a cost of $390,875. The investment is expected to generate $125,000 in annual cash flows for a period of five years. The required rate of return is 12%. The old machine has a remaining life of five years. The new machine is expected to have zero value at the end of the five-year period. The disposal value of the old machine at the time of replacement is zero. What is the internal rate of return?

(A) 15%

(B) 16%

(C) 17%

(D) 18%

Answer rating: 100% (QA)

D 18 Year Rate 015 016 017 018 1 0870 0862 0855 0847 2 0756 0743 0731 0718 3 065... View the full answer