The management of Kinion Corporation is considering the purchase of a machine that would cost...
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Accounting
The management of Kinion Corporation is considering the purchase of a machine that would cost $170,000, would last for 4 years, and would have no salvage value. The machine would reduce labor and other costs by $60,000 per year. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes.):
Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Required:
Determine the net present value of the project.
Determine the Internal rate of return.
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