Question a new dough mixing machine will cost carlos bakery, Ask an Expert

Accounting

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?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92642320

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