The World Dictionary Needs to Purchase a New Printing Machine

Multiple Choice

The World Dictionary needs to purchase a new printing machine costing $1.8 million.Management is estimating that the machine will generate cash inflows of $250 000 for three years and $350 000 for the following four years.If management requires a minimum 15 per cent rate of return,should they purchase this particular machine? Why or why not?

A) yes;because the IRR is 18.30 per cent
B) yes;because the IRR is 4.32 per cent
C) no;because the IRR is 18.30 per cent
D) no;because the IRR is 4.32 per cent
E) The answer can not be determined as there are multiple IRRs.