Locil Corporation Recently Purchased a New Machine for $415,275 with a Nine-Year

question 69

Multiple Choice

Locil Corporation recently purchased a new machine for $415,275 with a nine-year life.The old equipment has a remaining life of nine years and no disposal value at the time of replacement.Net cash flows will be $75,000 per year.What is the internal rate of return?

• A) 11%
• B) 16%
• C) 20%
• D) 24%

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Definitions:

Insurance Expense

The cost incurred by a business to purchase insurance, which provides financial protection against losses.

Unexpired Insurance

Portion of insurance premiums paid that has not yet been used as of a specific date, and is considered a current asset on the balance sheet.

Accounts Receivable

Financial obligations that customers or clients have to a company for products or services provided but not yet compensated for.

Fees Earned

Income received from providing services.