Question
(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial
(Net present value calculation)Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000 and will generate net cash inflows of $20,000 per year for 8years.
a.What is the project's NPV using a discount rate of 11% ?Should the project be accepted? Why or why not?
b.What is the project's NPV using a discount rate of 16% percent? Should the project be accepted? Why or why not?
c.What is this project's internal rate of return? Should the project be accepted? Why or why not?
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