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Maranantha Box Corporation is considering adding another machine for the manufacture of corrugated cardboard. The machine would cost $692,286. It would have an estimated life of 6 years and no salvage value. The company estimates that annual cash inflows would increase by $301,440 and that annual cash outflows would increase by $142,440. Management has a required rate of return of 9%.

(a) find out the net present value on this project, and discuss whether it should be accepted.

(b) find out the internal rate of return on this project, and discuss whether it should be accepted.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M965162

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