(NPV

with varying required rates of

return)

Big Steve's, a maker of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of

$110,000

and will generate free cash inflows of

$18,500

per year for

15

years.a. If the required rate of return is

9

percent, what is the project's

NPV?

b. If the required rate of return is

16

percent, what is the project's

NPV?

c. Would the project be accepted under part

(a)

or

(b)?

d. What is the project's

IRR?

a. If the required rate of return is

9

percent, the project's NPV is

$nothing.

(Round to the nearest cent.)b. If the required rate of return is

16

percent, the project's NPV is

$nothing.

(Round to the nearest cent.)c. Based on the NPV

criterion,

the project under part

(a)

should be

accepted

because its NPV is

positive

negative

positive

if the required rate of return is

9

percent.(Select from the drop-down menus.)Based on the NPV

criterion,

the project under part

(b)

should be

rejected

accepted

rejected

because its NPV is

negative

positive

negative

if the required rate of return is

16

percent.(Select from the drop-down menus.)d.

The

project's IRR is

nothing%.

(Round to two decimal places.)