Lockheed Martin is considering purchasing a new fine pitch machine to speed up the process in manufacturing Power Control Boards (PCBs). The initial cost of the machine is $125,000 and has a useful...

Lockheed Martin is considering purchasing a new fine pitch machine to speed up the process in

manufacturing Power Control Boards (PCBs). The initial cost of the machine is $125,000 and has a useful

life of 15 years. There is no salvage value for the fine pitching machine. Since manufacturing would speed

up so would the manual inspection step of the process and therefore labor costs are expected to be $4,000

per year. However, adding the new machine is expected to reduce rework costs of $15,000 per year. The

MARR of the company is 3%.
a. Calculate the IRR (internal rate of return) of purchasing the new fine pitch machine using

interpolation. You must show your work. Hint: Use the MARR as a starting point.
b. Calculate the IRR using an excel function. You must turn in an excel file. You can do this in

google sheets as well. Hint: Use RATE or IRR. (5 points)
c. Based on your calculations in (a) and (b) and the MARR stated in the problem is this a good

investment?