LG 3 LG 4 P10-19 NPV and IRR Gigantic Group has prepared the following estimates for a long-term expansion project. The initial investment is $248,250, and the project is expected to yield after-tax cash inflows of $65,000 per year for 5 years. The firm has an 8% cost of capital. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Would you recommend that the firm accept or reject the project? Explain your answer LG3 LG4 P10-20 NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects. Because of past financial difficulties, the company has a high cost of capital at 15%. Initial investment (CF) Project A $50,000 Project D $180,000 Yeart) Project B Project C $100,000 $80,000 Cash inflows (CF) $35,000 $20,000 50,000 40,000 50,000 60,000 1 2 $20,000 20,000 20,000 $100,000 80,000 60,000 3 a. Calculate the NPV of each project, using a cost of capital of 15%. b. Rank acceptable projects by NPV. c. Calculate the IRR of each project, and use it to determine the highest cost of cap- ital at which all the projects would be acceptable