Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

does this look right so far and how do I figure out question c? Big Steve's, makers of swizzle sticks, is considering the purchase of

does this look right so far and how do I figure out question c?

image text in transcribed

Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $90,000 and will generate net cash inflows of $16,000 per year for 8 years. What is the project's NPV using a discount rate of 8 percent? Should the project be accepted? Why or why not? What is the project's NPV using a discount rate of 13 percent? Should the project be accepted? Why or why not? What is this project's internal rate of return? Should the project be accepted? Why or why not? If the discount rate is 8 percent, then the project's NPV is $ 1946.22. (Round to the nearest dollar.) The project should be accepted because the NPV is positive and therefore adds value to the firm. (Select from the drop-down menus) If the discount rate is 13 percent, then the project's NPV is $ 13219.68. (Round to the nearest dollar.) The project should not be accepted because the NPV is negative and therefore does not add value to the firm. (Select from the drop-down menus.) This project's internal rate of return is (Round to two decimal places.) If the project's required discount rate is 8% then the project accepted, because the IRR is the project's required discount rate is 8%. then the project drop-down menus.) If the project's required discount rate is 13%, then the project accepted, because the IRR is the required discount rate (select from the drop-down menus.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Financial Planning

Authors: Lewis J. Altfest

2nd edition

1259277186, 978-1259277184

More Books

Students also viewed these Finance questions