3. A company would like to buy an equipment will increase 30 % in the production capacity. This equipment costs P100,000. The cash outflows in first, second and third year areP30,000, P40,000 and P70,000 respectively. Required: a. Find out IRR using trial and error method. b. Find out IRR using excel method

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 4EB: Assume a company is going to make an investment in a machine of $825,000 and the following are the...
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3. A company would like to buy an equipment will increase 30 % in the production capacity. This equipment
costs P100,000. The cash outflows in first, second and third year areP30,000, P40,000 and P70,000 respectively.
Required:
a. Find out IRR using trial and error method.
b. Find out IRR using excel method
Transcribed Image Text:3. A company would like to buy an equipment will increase 30 % in the production capacity. This equipment costs P100,000. The cash outflows in first, second and third year areP30,000, P40,000 and P70,000 respectively. Required: a. Find out IRR using trial and error method. b. Find out IRR using excel method
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