Assume Company ABC must decide whether to purchase a piece of factory equipment for $45,000. The equipment would only last four years, but it is expected to generate $15,000 of additional annual profit for the first three years and an additional annual profit of $16,000 for the 4th year. Using IRR, Company ABC can determine whether the equipment purchase is a better use of its cash than its other investment options.

What is the NPV of the project for a discount rate equals 12%? (consider rounding)	Answer 1Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
What is the NPV of the project for a discount rate equals 13 %? (consider rounding)	Answer 2Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
What is the NPV of the project for a discount rate equals 14 %? (consider rounding)	Answer 3Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
What is the value of the IRR of this project?	Answer 4Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
If the required rate of return of ABC is 14%, the project is accepted (True, False)	Answer 5Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
If the required rate of return of ABC is 11 %, the project is accepted. (True, False)	Answer 6Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
The company evaluated another alternative with IRR equals 12%, this alternative is better than the proposed project (True, False)	Answer 7Choose...-27213.89%204817False13.25%-616True1,21414.15%1,068
If the discount rate of the project is 15% the project should be rejected (True, False)