Business
Business, 18.08.2020 20:01, phillipmccormick

Copa Corporation is considering the purchase of a new machine costing $150,000. The machine would generate net cash inflows of $43,690 per year for 5 years. At the end of 5 years, the machine would have no salvage value. Copa’s cost of capital is 12 percent. Copa uses straight-line depreciation. The present value factors of annuity of $1.00 for different rates of return are as follows: Period 12% 14% 16% 18%
4 3.0373 2.91371 2.79818 2.69006
5 3.60478 3.43308 3.27429 3.12717
6 4.1141 3.88867 3.68474 3.49760
The proposal's internal rate of return (rounded to the nearest percent) is:
A. 14 percent.
B. 16 percent.
C. 18 percent.
D. 12 percent.

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