You have been asked to select an alternative project based on its IRR. The project involves buying a new poliching machine that will replace three workers who polish the parts by hand. The machine will cost $375,280 in year 1.

The workers each cost $31,000 per year in salary and benefits:


The machine will require and expected $1500 per year in maintenance and will have a useful lifespan of 9 years?

At the end of 9 years, the machine will have an expected salvage value of $7000. Your corporate WACC is 5%. What is the IRR for this project cashflow?

Answer rating: 100% (QA)

The Internal Rate of Return IRR is the discount rate that makes the Net Present Value NPV of a proje... View the full answer