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Zebra micro-devices, Inc. is considering an investment in new equipment that will cost $200,000 and is...

    1. Zebra micro-devices, Inc. is considering an investment in new equipment that will cost $200,000 and is estimated to provide the following annual savings over its 5-year life:
  2. What is the internal rate of return associated with the new equipment?
  3. Should the company acquire the new equipment if it can earn a return of 12% on its investments?
  4. Should the company acquire the new equipment if it can earn a return of 10% on its investments?

Year

Savings estimate

1

$80,000

2

$60,000

3

$50,000

4

$40,000

5

$30,000

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Answer #1

А в 1 Part b: 2 Calculation of Internal Rate of Return associated with new Equipment 3 Year Cash Flows 4 0 -200000 5 1 80000

1 11 12 Part c: 13 Calculation of NPV of the New Equipment 14 Year Cash Flows Discount Factor@12% Discounted Cash Flows 15 A

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