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Rate of Return of Miniature Fittings and Valves

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Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $30,000 and annual costs of $18,000. Annual revenue was $27,000, and the used equipment was salvaged for $4000. What rate of return did the company make on this product?
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Solution Summary

This solution is comprised of an explanation in excel which has been used to calculate the internal rate of return (IRR).

Solution Preview

The answer is in the attached EXCEL file. The excel function used for calculating the rate of return is IRR.

"Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of ...

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