Protiviti Is Considering Automating Its Production Line at a Cost

question 61

Multiple Choice

Protiviti is considering automating its production line at a cost of $40,000 to acquire the necessary equipment. The annual cost savings are expected to be $8,000 for 14 years. The firm requires a 20% rate of return. Ignore income taxes. What is the internal rate of return on this investment?

• A) Cannot be determined
• B) Less than 20%
• C) Equal to 20%
• D) More than 20%

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