A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually O a. IRR=3% semiannual O b. IRR=6% semiannual Oc. IRR=12% semiannual Od. IRR=6.02% semiannual

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
None
A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and
there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually
O a. IRR=3% semiannual
O b. IRR=6% semiannual
Oc. IRR=12% semiannual
Od. IRR=6.02% semiannual
Transcribed Image Text:A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,500 per semester Its useful life is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually O a. IRR=3% semiannual O b. IRR=6% semiannual Oc. IRR=12% semiannual Od. IRR=6.02% semiannual
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education