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Calculate the rate of return on this new machine

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Question - Eisler 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 $430,000. 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 $101,000 for the next 6 years. Management requires a 10% rate of return on all new investments.

INSTRUCTIONS: Calculate the rate of return on this new machine. Should the investment be accepted?

Reference no: EM131813612

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