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Cost of equipment and internal rate of return

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(Ignore income taxes in this problem) Joe Flubup is the president of Flubup, Inc. He is considering buying a new machine that would cost $25,470. Joe has determined that the new machine promises an internal rate of return of 14%, but Joe has misplace the paper which tells the annual cost savings promised by the new machine. He does remember that the machine has a projected life of 12 years. Based on these data, the annual cost savings are:
a. it is impossible to determine from the given data
b. $2122.50
c. $4500.00
D. $4650.00

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This solution helps with a question involving the cost of equipment and internal rate of return.

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We are given the IRR. The PV of annual cost savings discounted ...

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