Kingston Corp

question 143

Essay

Kingston Corp.is considering a new machine that requires an initial investment of $480,000 installed,and has a useful life of 8 years.The expected annual after-tax cash flows for the machine are $89,000 for each of the 8 years and nothing thereafter.
a.Calculate the net present value of the machine if the required rate of return is 11 percent.
b.Calculate the IRR of this project.
c.Should Kingston accept the project (assume that it is independent and not subject to any capital rationing constraint)? Explain your answer.

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Definitions:

Heart

A muscular organ in most animals, which pumps blood through the blood vessels of the circulatory system, supplying oxygen and nutrients to the body.

Radiography

The medical imaging technique using X-rays, gamma rays, or similar ionizing radiation and non-ionizing radiation to view the internal form of an object.

X-ray Record

An image or record produced by radiography, showcasing the structure within the body for medical examination or diagnosis.

Radioscopy

The examination of the internal structures of the body using X-rays or other high-energy radiation, often conducted in real time imaging like fluoroscopy.