1.Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of $5,500,000 and would generate annual net cash inflows of $1,200,000 per year for 9 years. Calculate the project's NPV using a discount rate of 5 percent.

If the discount rate is 5 percent, then the project's NPV is $

2. Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000

and will generate net cash inflows of $17,000 per year for 9 years.

a.What is the project's NPV using a discount rate of 7 percent? Should the project be accepted? Why or why not?

b.What is the project's NPV using a discount rate of 13 percent? Should the project be accepted? Why or why not?

c.What is this project's internal rate of return? Should the project be accepted? Why or why not?