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Calculate the Internal Rate of Return of each of the followingpotential investments and recommend whether or not to include themin the upcoming capital budget given that the firm’s cost ofcapital is 14.5%.New Software:InitialCost $25,000TrainingCost $12,000Annual Cost Savings $10,500UsefulLife 6 YearsMachine A or Machine BNote: The key word here is “or”.One or the other machine must be bought. So, the analysis should bebased on the incremental cash flows resulting from the moreexpensive alternative.Annual Production inunits 40,000Cost of MachineA $38,000Cost of MachineB $32,000Unit Cost to Produce on MachineA $2.20Unit Cost to Produce on MachineB $2.22UsefulLife 12 Years