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a) Big Steve's Swizzle Sticks is considering the purchase of a new plasticstamping machine. This machine will require an initial cash outlay of $8,000,000 and
a) Big Steve's Swizzle Sticks is considering the purchase of a new plasticstamping machine. This machine will require an initial cash outlay of $8,000,000 and will generate annual net cash inflows of $2,000,000 per year for six years. (2.5 Marks) i. Calculate the project's NPV provided the firm uses a discount rate of 9% ii. What decision will Big Steve's Swizzle Sticks make based on your answer to (i) b) Project Alphabet requires an initial investment of $250,000 and is expected to generate a cash flow of $160,000 in year 1,$45,000 per year in years 2, and $65,000 in year 3. (2.5 Marks) i. Calculate the Project's Profitability Index at an Interest rate of 15\%. ii. What will be the decision on Project Alphabet
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