Patsy Folson is evaluating what appears to be an attractive opportunity. She is
ID: 2377074 • Letter: P
Question
Patsy Folson is evaluating what appears to be an attractive opportunity. She is currently the owner of a small manufacturing company and has the opportunity to acquire another small company's equipment that would provide production of a part currently purchased externally. She estimates that the savings from internal production will be $75,000 per year. She estimates that the equipment will last 10 years. The owner is asking $400,000 for the equipment. Her company's cost of capital is 8 percent. Calculate the IRR for Patsy Folson
Explanation / Answer
try 14%...i guess it should work