Managerial Accounting: E21-43 Lawlor Lawn Service is considering purchasing a mower
Managerial Accounting E21-34 Using payback, accounting rate of return, discounted cash flow, and IRR to make capital investment decisions This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 20-33 of Chapter 20. Lawlor Lawn Service is considering purchasing a mower that will generate cash inflows of $9,000 per year. The mower has a zero residual value and an estimated useful life of three years. The mower costs $20,000. Lawlor's required rate of return is 12%. Requirements 1. Calculate payback period, rate of return, net present value, and IRR for the mower investment. 2. Should Lawlor invest in the new mower?
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