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 outlay
(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 $95000 and will generate net cash inflows of $17,000 per year for 8 years. a.What is the project's NPV using a discount rate of 7 percent? Should the project be accepted? Why or why not? b.What is the project's NPV using a discount rate of 17 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? Question content area bottom Part 1 a.If the discount rate is 7 percent, then the project's NPV is $6512 . (Round to the nearest dollar.) Part 2 The project should be accepted because the NPV is positive and therefore adds value to the firm.(Select from the drop-down menus.) Part 3 b.If the discount rate is 17 percent, then the project's NPV is $negative 23478 . (Round to the nearest dollar.) Part 4 The project should not be accepted because the NPV is negative and therefore does not add value to the firm.(Select from the drop-down menus.) Part 5 c.This project's internal rate of return is .......%. (Round to two decimal places.) Need help answer on the C thank you
years. a. What is the project's NPV using a discount rate of 7 percent? Should the project be accepted? Why or why not? b. What is the project's NPV using a discount rate of 17 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? a. If the discount rate is 7 percent, then the project's NPV is $6512. (Round to the nearest dollar.) The project accepted because the NPV is and therefore the firm. (Select from the drop-down b. If the discount rate is 17 percent, then the project's NPV is : (Round to the nearest dollar.) The project accepted because the NPV is and therefore value to the firm. (Select from the drop-down menus.) c. This project's internal rate of return is 9%. (Round to two decimal places.)Step by Step Solution
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