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King’s Department store is analyzing the purchase of manufacturing equipment that will cost $40,000. The annual...

  1. King’s Department store is analyzing the purchase of manufacturing equipment that will cost $40,000. The annual cash inflows for the next three years will be, $20,000, $18,000, and $13,000.
  1. Calculate the internal rate of return (IRR) for this investment.

b. If the company’s cost of capital is 12%, should the equipment be purchased? Why or why not



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