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Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital

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Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $1,400,000 $ 140,000 8 years $ 150,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent. 3. Calculate the net present value using a 13 percent discount rate. 4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 13 percent Complete this question by entering your answers in the tabs below. Red 1 and 2 Req 3 and 4 1. Calculate the project's not present value. (Future Value of $1. Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations Round the final answer to nearest whole dollar) 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent. Req 1 and 2 Reg 3 and 4 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round Intermediate calculations. Round the final answer to nearest whole dollar) 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent. Show less 1 Net Present Value 2. Internal Rate of Return (IRR) Req 3 and 4 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 and 4 3. Calculate the net present value using a 13 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.) 4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 13 percent. Show less 3 Net Present Value Internal Rate of Return (IRR) 4

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