Question: will rate for answer! A company is considering the purchase of a new system for manufacturing pre-cast concrete beams that costs $800k and will benefit

will rate for answer!
will rate for answer! A company is considering
A company is considering the purchase of a new system for manufacturing pre-cast concrete beams that costs $800k and will benefit them annually by increasing their sales. The machine expected service life is 5, 7, or 8 years with probabilities of 25%, 40% and 35% respectively. They know that the more they use the machine each year, the lower its salvage value would be as shown on the following decision tree. What is the probability that the Internal Rate of Return of this investment is over 18%? SALVAGE BENEFIT 5yrs occision 25% $800k faccisay Decision - 7ys 40% Sys $2ook/yr Sx2ook s >$250kyr SEAisok $3001 yr Secook $180ktyr Scaleok $ 2504 y look 7 $150k/yr selook $ 180kbyr Subdok. EQUIRENT ACQUISTION Decision 35% A company is considering the purchase of a new system for manufacturing pre-cast concrete beams that costs $800k and will benefit them annually by increasing their sales. The machine expected service life is 5, 7, or 8 years with probabilities of 25%, 40% and 35% respectively. They know that the more they use the machine each year, the lower its salvage value would be as shown on the following decision tree. What is the probability that the Internal Rate of Return of this investment is over 18%? SALVAGE BENEFIT 5yrs occision 25% $800k faccisay Decision - 7ys 40% Sys $2ook/yr Sx2ook s >$250kyr SEAisok $3001 yr Secook $180ktyr Scaleok $ 2504 y look 7 $150k/yr selook $ 180kbyr Subdok. EQUIRENT ACQUISTION Decision 35%

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