46 ences W Merrill Corporation has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value $ 2,500,000 $ 160,000 8 years $170,000 Merrill's cost of capital 7 Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 7 percent. 3. Calculate the net present value using a 9 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. 4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 9 percent. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 and 4 1. Calculate the project's net present value. Note: Do not round intermediate calculations. Round the final answer to nearest whole dollar. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 7 percent. 1. Net Present Value 2. Internal Rate of Return (IRR) Reg 1 and 2 Reg 3 and 4 < Prev 3 of 5 Next