D911 company 11600 in direct labor costs It is expected to l

D9-11 company $11,600 in direct labor costs. It is expected to last 14 years. (a) Calculate the internal rate of return on the weaving machine. 3. Internal rate ofreturn DOLL

Solution

Internal rate of Return = 13% calculation of Internal rate of Return: IRR factor = Machine consideration cost / savage in Direct Labour cost = $73,109/$11,600 = 6.3025 Looking in the present value of an annuity table row for 14 periods , this factor is found in the 13% coloumn. Therefore the Internal rate of Return is 13%.