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 $17,000 per year for 9 years.

a.What is the project's NPV using a discount rate of 7 percent? Should the project be accepted? Why or why not?

The project shouldn't be / should be accepted because the NPV is positive/negative and therefore adds/subtracts value to the firm.

b.What is the project's NPV using a discount rate of 13 percent? Should the project be accepted? Why or why not?

The project shouldn't be / should be accepted because the NPV is positive/negative and therefore adds/subtracts value to the firm.

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

The project shouldn't be / should be accepted because the NPV is positive/negative and therefore adds/subtracts value to the firm.