Avery Company needs a new computerized laser system for its manufacturing process. The cost of the new system is $$1,000,000.$ The expected useful life of the system is $10$ years. At the end of $10-$year period, the system would have no the following amounts per year:

Yr$.1$$$100,000$

Yr$,275,000$

Yr$.367,000$

Yr$.495,000$

Yr$.590,000$

Yr$.6105,000$

Yr$.780,000$

Yr$,868,000$

Yr$.977\mathrm{.}000$

Yr$.1077,000$

Avery wants to know the net present value and internal rate of return of the system to accept or reject this investment. The minimum required rate of return of the company is $19\%$ on all capital investments.

What is the NPV and IRR using your calculator? Should the company accept or reject the investment? Why? You must show your work or no credit. Your answer$($s$)$ must reflect four decimal places to the right of the decimal point or no credit.

Solution EXAMPLE: follow it to explain your answer

$[$CF$]$

$[$DOWN ARROW$]$

C$01[30000][$ENTER$]$

$[$DOWN ARROW$]$

F$01[8][$ENTER$]$

$[$DOWN ARROW$]$

$[$NPV$]$

I$=[16][$ENTER$]$

NPV$=[$CPT$]$

NPV$=$$$49,607\mathrm{.}7269$

$[$IRR$][$CPT$]$

IRR$=33\mathrm{.}4872$