Question - Quinn Industries is considering the purchase of a machine that would cost $420,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $92,500. The machine would reduce labor and other costs by $88,000 per year. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes.)
Compute the net present value of the project by inputting the variables that are entered into your calculator/Excel.
Compute the internal rate of return of the project by inputting the variables that are entered into your calculator/Excel.