What is the internal rate of return


Company YYY is thinking of buying a new and improved machine. This machine costs $6 million today. This machine will benefit the company for next 10 years and will bring annual cash flow of $1,061,947.The company%u2019s cost of capital is 8%

  1. What is the Internal rate of return (IRR) from this investment?
  2. Is the purchase of machine a good idea or bad? Why?

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Accounting Basics: What is the internal rate of return
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