Question: The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating the machine will generate cash inflows of $223,000 the first

The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating the machine will generate cash inflows of $223,000 the first year and $600,000 for the following three years. If management requires a minimum 12 percent rate of return, should the firm purchase this particular machine? Why or why not?

Answer choices:

No, because the IRR is 12.74 percent

Yes, because the IRR is 12.74 percent

The answer cannot be determined as there are multiple IRRs

Yes, because the IRR is 10.75 percent

No, because the IRR is 10.75 percent

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