Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of

$105,000

and will generate net cash inflows of

$21,000

per year for

11

years.

a.What is the project's NPV using a discount rate of

9

percent?

Should the project be accepted? Why or why not?

b.What is the project's NPV using a discount rate of

16

percent? Should the project be accepted? Why or why not?

c.What is this project's internal rate of return? Should the project be accepted? Why or why not?