(Ignore Income Taxes in This Problem

question 102

Essay

(Ignore income taxes in this problem. )The management of Peregoy Corporation is considering the purchase of an automated molding machine that would cost $255,552,would have a useful life of 5 years,and would have no salvage value.The automated molding machine would result in cash savings of $64,000 per year due to lower labor and other costs.
Required:
Determine the internal rate of return on the investment in the new automated molding machine.Show your work!

---

Definitions:

Cash Balance

The amount of cash on hand at a given time, reflecting the liquidity position of an entity, as recorded in the financial statements.

Petty Cash Fund

A small amount of cash kept on hand for making immediate, low-value payments instead of writing checks.

Transportation-In

Costs associated with bringing inventory to a business, which are often added to the purchase price of goods.

Office Supplies

Various everyday items used in offices for tasks such as writing, organization, and communication, including pens, paper, and staplers.