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Eisler Corporation

Price: $1.99


Eisler Corporation is involved in the business of injection molding of plastics. It is
considering the purchase of a new computer-aided design and manufacturing machine for
$430,000. The company believes that with this new machine it will improve productivity
and increase quality, resulting in an increase in net annual cash flows of $101,000 for the
next 6 years. Management requires a 10% rate of return on all new investments.

Instructions
Calculate the internal rate of return on this new machine. Should the investment be
accepted?

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