Business
Business, 21.12.2019 05:31, colton7856

Bsu inc. wants to purchase a new machine for $35,500, excluding $1,400 of installation costs. the old machine was bought five years ago and had an expected economic life of 10 years without salvage value. this old machine now has a book value of $2,200, and bsu inc. expects to sell it for that amount. the new machine would decrease operating costs by $7,500 each year of its economic life. the straight-line depreciation method would be used for the new machine, for a six-year period with no salvage value.

(a) determine the cash payback period. (round cash payback period to 1 decimal place, e. g. 10.5.)
(b) determine the approximate internal rate of return. (round answer to 0 decimal places, e. g. 10. for calculation purposes, use 5 decimal places as displayed in the factor table provided.)
(c) assuming the company has a required rate of return of 6%, determine whether the new machine should be purchased.

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Bsu inc. wants to purchase a new machine for $35,500, excluding $1,400 of installation costs. the ol...

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