Managerial Accounting: E12-4 Kendra Corporation is involved in the business of injection molding

Managerial Accounting

E12-4
Kendra Corporation is involved in the business of injection molding of plastics. It is considering the purchase of a new computer-aided design and manufacturing machine for $425,000. The company believes that with this new machine it will improve productivity and increase quality, resulting in an increase in net annual cash flows of $95,000 for the next 6 years. Management requires a 10% rate of return on all new investments.

Calculate the internal rate of return on this new machine. (Use the tables to determine the percentage.)
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