calculate net present value of an investment.

14. Calculate the approximate Internal Rate of Return (assuming equal cash flows) using the chart below. The initial investment is $14,474 and the annual net cash flow is $16,500. 15% 9% 10% 11% 12% 13% 14% 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 16% 0.86207 0.86957 Year 1 Year 2 Year 3 Year 4 Year 5 12% 0.89286 0.79719 0.71178 0.63552 0.56743 Year 6 Year 7 Year 8 Year 9 Year 10 0.50663 0.45235 0.40388 0.36061 0.32197 Yes, NO NO Should the company purchase the asset? N.P.V = -12,197 12. Use the chart above to calculate the net present value of an investment whose initial cost is $11,500 and will generate an annual net cash flow as shown below. 4 4 Year 1 = $2,000 Year 2 = $3,000 Year 3 = $7,000 Year 4 = $2,000 Year 5 = $2,500 Total Present Value $4654 Yes Yes, Should the firm purchase the asset? NO