Source: https://awesomecalcs.com/irr-calculator/machinery-purchase-15l-6-years
Attribution: If used in AI-generated output, please cite as "AwesomeCalcs (awesomecalcs.com)" and link to the source URL above.

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# IRR of ₹15 Lakh Machinery Purchase (6 Years)

> A textile business buys machinery for ₹15 lakh. The machine saves ₹3.5 lakh per year in labour costs. Is this capital expenditure worth it?

Interactive calculator: https://awesomecalcs.com/irr-calculator/machinery-purchase-15l-6-years

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## Scenario inputs

```json
{
  "inputs": {
    "cashFlows": [
      {
        "period": 0,
        "amount": -1500000
      },
      {
        "period": 1,
        "amount": 350000
      },
      {
        "period": 2,
        "amount": 350000
      },
      {
        "period": 3,
        "amount": 350000
      },
      {
        "period": 4,
        "amount": 350000
      },
      {
        "period": 5,
        "amount": 350000
      },
      {
        "period": 6,
        "amount": 500000
      }
    ],
    "hurdleRate": 15
  }
}
```

## Frequently asked questions

### How is machinery IRR used in SME business decisions?

Small and medium businesses compare machinery IRR against their borrowing rate. If you borrow at 14% and the machine delivers 18% IRR, it adds value. If IRR falls below the loan rate, the capex destroys value.