Question
Net present valuecalculation) BigSteve's, makers of swizzlesticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $110,000
Net present valuecalculation) BigSteve's, makers of swizzlesticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $110,000 and will generate net cash inflows of $16,000 per year for 11 years.
a.What is theproject's NPV using a discount rate of 8 percent? Should the project beaccepted? Why or whynot?
b.What is theproject's NPV using a discount rate of 13 percent? Should the project beaccepted? Why or whynot?
c.What is thisproject's internal rate ofreturn? Should the project beaccepted? Why or whynot?
If the discount rate is 8 percent, then theproject's NPV is $
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