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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
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 $100,000 and will generate free cash inflows of 18000 per year for 15 years. a. If the required rate of return is 5 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?
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