$296,500 per year for 10 years. The cash infows begin at the end of year 7 . Assume the cost of capital is 10.8% for parts (a), (b), and (c) below. a. Caloulabe the NPV of this investiment epportunity. Shodly the comgary make the e evesiment? b. Calculate the IRR and use it to detennine the maximum deviation alowatie in the cost of cactal eatimate to leave the docision unchanged. c. Wit costs remaining at \$205. 600 per year, how long nust developresent tast to change the decision? Assime the cost of capital is 13.50 for parts (d) (e), and (f) below. d. Cabulate the NPV of this investinent eqportunify Stodid the compary makin the imevimen? 6. How fuchi mast this cost of cacita essmate deviate to change the decision? f. Weh costs remaning at 5205.800 per year, how lang must developntient last to change the deciisen? a. Calculate the NPV of this investment opportunity. If the cost of capital is 10.8%, the NPV is $ (Round to the nearest dollar.) Should the company make this investment? (Select the best choice below.) A. Reject the investment because the NPV is less than zero (\$0). B. Reject the investment because the NPV is equal to or greater than zero ($0). C. Accept the investment because the NPV is equal to or less than zero ($0). D. Accept the investment because the NPV is equal to or greater than zero (\$0). b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. The IRR is \%. (Round to two decimal places.) If the cost of capital is 10.8%, the maximum deviation is \%. (Round to two decimal places.) c. How long must development last to change the decision? For the decision to change, development must last years, or longer. (Round to two decimal places.) d. Calculate the NPV of this investment opportunity. Should the company make the investment? If the cost of capital is 13.5%, the NPV is $ (Round to the nearest dollar.) Should the company make the investment? (Select the best choice below.) A. Accept the investment because the NPV is equal to or greater than zero ($0). B. Reject the investment because the NPV is equal to or greater than zero ($0). C. Reject the investment secause the NPV is less than zero ($0). D. Accept the investment because the NPV is equal to or less than zero (\$0). e. How much must this cost of capital estimate deviate to change the decision? The maximum deviation is \%. (Round to two decimal places.)
