New process machine for the firm manufacturing facility

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The A.M.I. Company is considering installing a new process machine for the firm's manufacturing facility. The machine costs $578,000 installed, will generate additional revenue of $88,000 per year, and will save $57,000 per year in labor and material costs. The machine will be financed by a $214,000 bank loan repayable in three equal annual installments with a 4% interest rate. The machine will be depreciated using seven-year MACRS. The useful life of the machine is 10 years when the machine will be sold for $21,000. The marginal tax rate is 38%. Compute the IRR of the investment. Enter your answer as a percentage between 0 and 100.

Reference no: EM131918820

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