Isomer Industrial Training Corporation is considering the purchase of new presentation equipment at a cost of 150,000 dollars. The equipment has an ..

Isomer Industrial Training Corporation is considering the purchase of new presentation equipment at a cost of 150,000 dollars. The equipment has an ..

Q:


Isomer Industrial Training Corporation is considering the purchase of new presentation equipment at a cost of 150,000 dollars. The equipment has an estimated useful life of 10 years with an expected salvage value of zero. The equipment is expected to generate net cash inflows of 35,000 dollars per year in each of the 10 years. Isomer's cost of capital is 16%. Isomer uses the straight-line method of depreciation for its assets.
Required:
a. Between what two percents does the internal rate of return of the presentation equipment fall?
b. What is the payback period of the presentation equipment





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