Initial investment

Useful life

Salvage value

Expected sales per year

$$300,000$

$8$ years

$$30,000$

$10,600$ units

Materials, labor, and overhead $($except depreciation$)$

Depreciation$-$Machinery

Selling, general, and administrative expenses

Selling price per unit

$$5,000$

$30,000$

$15,000$

$$13$

a$.$ Compute the Investment's net present value.

b$.$ Using the answer from part $a,$ Is the Investment's internal rate of return higher or lower than $12\%?$ Hint: It is not necessary to compute the IRR to answer this question.

Complete this question by entering your answers in the tabs below.

Required $A$

Compute the investment's net present value.

Note: Negative net present values should be indicated with a minus sign. Round your present value factor to $4$ decimals.

Round your answers to the nearest whole dollar.

$\backslash$table$[[,$Net Cash Flows,$x,$Present Value,$=,\backslash$table$[[$Present Value of Net$],[$Cash Flows$]]],[$Years $1-8,,,,=,],[$Year $8$ salvage,,,,$=,],[$Totals$,,=,,$E$,s-0$