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    Present Value/IRR

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    The Zero Machine Company is evaluating a capital expenditure proposal that requires an initial investment of $20,960 and has predicted cash inflows of $5,000 per year for 10 years. It will have no salvage value.


    a. Using a required rate of return of 16%, determine the net present value of the investment proposal.

    b. Determine the proposal's internal rate of return.

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    Solution Summary

    Excel file contains calculations of Present Value and IRR.