Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of $4,000,000 and would generate annual net cash inflows of $900,000 per year for 7 years. Calculate the project's NPV using a discount rate of 5 percent. (Round to the nearest dollar.)

a. If the discount rate is 5 percent, then the project's NPV is: $

b. 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 $19,000 per year for 11 years.

a. What is the project's NPV using a discount rate of 7 percent? (Round to the nearest dollar.)

If the discount rate is 7 percent, then the project's NPV is: $

Should the project be accepted?

The project (should or should not) be accepted because the NPV is (?). and therefore will (?)value to the firm.

b. What is the project's NPV using a discount rate of 16 percent?

If the discount rate is 16 percent, then the project's NPV is: $

Should the project be accepted? Why or why not?

c. What is this project's internal rate of return? (Round to two decimal places.)

This project's internal rate of return is:

%

Should the project be accepted? Why or why not?

If the project's required discount rate is 7%, then the project Choose an item. accepted because the IRR is Choose an item. the required discount rate.

If the project's required discount rate is 16%, then the project Choose an item. accepted because the IRR is Choose an item. the required discount rate.