XYZ, Inc., has developed a new jig at a cost of $2,500,000. Projected profits from the...

 

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XYZ, Inc., has developed a new jig at a cost of $2,500,000. Projected profits from the sale of jigs for the next six years are: $250,000; $350,000; $430,000; $500,000; $400,000; and $300,000. Ắt the end of the sixth year, the productive assets associated with the jig project will be disposed of for $850,000 (profit). Determine the rate of return (i*) that will result from the jig project and find if the project is acceptable. The firm's MARR is 4%. XYZ, Inc., has developed a new jig at a cost of $2,500,000. Projected profits from the sale of jigs for the next six years are: $250,000; $350,000; $430,000; $500,000; $400,000; and $300,000. Ắt the end of the sixth year, the productive assets associated with the jig project will be disposed of for $850,000 (profit). Determine the rate of return (i*) that will result from the jig project and find if the project is acceptable. The firm's MARR is 4%.

Answer rating: 100% (QA)

Given that the MARR of the company is 4 Rate of retu... View the full answer