16. What is the net present value of a project that has an initial cost of $42,700 and produces cash inflows of $9,260 a year for 9 years if the discount rate is 14.65 percent? Less than $1,000 $1,000 to $2,000 $2,000 to $3,000 $3,000 to $4,000 More than $4,000 A) sn D) E) ou are considering an investment for which you require a rate of return of 8.5 percent. The investment costs $67,400 and will produce cash inflows of $26,720 for three years. Should you accept this project its internal rate of return? Why or why not? A) Yes; because the IRR is 9.51 percent B) Yes; because the IRR is 7.08 percent C) Yes; because the IRR is 6.67 percent D) No; because the IRR is 7.08 percent E) No; because the IRR is 9.51 percent based on 18. The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating the machine will generate cash inflows of $228,000 the first year and $600,000 for the following three years. If management requires a minimum 12 percent rate of return, should the firm purchase this particular machine based on its IRR? Why or why not? A) Yes, because the IRR is 10.76 percent. B) Yes, because the IRR is 12.74 percent. C) No, because the IRR is 10.75 percent. D) No, because the IRR is 12.74 percent. E) None of the above. A firm is reviewing a project that has an initial cost of $67,000. The 19. project will produce annual cash inflows, starting with Year 1, of $8 $13,400, $18,600, $25,100, and finally in Year 5, $37,900. What is the profitability index if the discount rate is 11 percent? A) Less than .98 B) 95 to 1.00 c) 1.00 to 1.05 D) 1.05 to 1.10 E) Greater than 1.10 ,000