RenMed Inc. wants to replace a 10 year old machine with a new machine that is more efficient. The old machine cost $80,000 when new and has a current book value of $17,000. RenMed can sell the machine to a foreign buyer for $14,000. RenMed's tax rate is 21%. The effect of the sale of the old machine on the initial outlay for the new machine is__

($13,240).

($12,610).

($14,210).

$(14,630).

Which one of the following is the most recommended investment decision making tool?

Internal Rate of Return

Profitability Index

Net Present Value

Payback Period

Zionmanufacturing, Inc. is considering a new inventory system that will cost $475,000. The system is expected to generate $315,000 in year one, -$35,000 (negative) in year two, $130,000 in year three, and $150,000 in year four. Zion manufacturing's required rate of return is 5%. What is the MIRR (Modified Internal Rate of Return) of this project?

5%

8.93%

6.47%

7.14%