Determine the irr for the machine

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Question: A new dough mixing machine will cost Carlo's bakery $23,000 and will generate $4,000 revenue per year for 5 years. The salvage value will be $4, 500 after the 5 years. Assume the bakery has a 5% MARR.

a) Determine the IRR for the machine. Please use interpolation.

b) Since Buddy wants at least a 5% return on his investments, should the machine be purchased? Why?

Reference no: EM132013886

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