Question

5)Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $52,000. The annual cash inflows for the next three years will be:
 YearCash Flow1 $26,000 2  24,000 3  19,000 
 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method.
 a.Determine the internal rate of return.  (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
   Internal rate of return %  
 b.With a cost of capital of 14 percent, should the equipment be purchased?   YesNo

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