Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,250,000 if purchased today. It will generate the following cash disbursements and receipts. 1) Should Duncombe pursue the investment if the interest rate for the capital is 8% ? Why? (1pt) 2) What is the internal rate of return of this project? (1pt) Year Cash Receipts 1 950,000 2 925,000 3 800,000 4 675,000 Cash Disbursements 500,000 475,000 450,000 430,000 SOLUTION (NPV Problem) INPUT DATA Rate= 8% Year Cash Inflows 0 Cash Outflows Net Cash Interest 8% Flow rate $ 1,250,000 NPV= NPV(rate,value1,value2,...) 1 $ 950,000 $ 500,000 2 $ EA EA 3 4 $ $ EA 925,000 $ 475,000 800,000 $ 450,000 IRR IRR (vlaues) 675,000 $ 430,000