Answered

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Soft Touch Car Wash is considering the purchase of a new automated sudser and has narrowed it down to 2 possible machines: One, which costs more but lasts longer, and one that is less expensive but has a shorter useful life. The expected cash flows associated with the 2 machines are as follows:

Expected cash flow of two machines
Year Machine A Machine B
0 50.000 30.000
1 20.000 20.000
2 20.000 20.000
3. 20.000 NA
4. 20.000 NA
What is the Internal Rate of Return for each machine?

Sagot :

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