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Compute the irr under this new assumption

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Reference no: EM133160316

Question - Applecross Dental Services is investigating expanding its operations by acquiring additional teeth cleaning equipment. The equipment would cost $137,000 and management has estimated that it would result in net cash inflows of $15,800 per year. The equipment would have a 15-year useful life with an expected salvage value of $14,100. (Ignore income taxes.)

Required -

1. Compute the equipment's IRR.

2-a. Assume that instead of $15,800. The salvage value in 15 years for the new equipment will be $0. Compute the IRR under this new assumption.

Reference no: EM133160316

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