Question
(NPV with varying required rates of return) Gubanich Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an
(NPV
with varying required rates of
return)
Gubanich Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of
$5,000,000
and would generate annual free cash inflows of
$1,200,000
per year for
8
years. Calculate the project's NPV given:a. A required rate of return of
8
percentb. A required rate of return of
12
percentc. A required rate of return of
15
percentd. A required rate of return of
16
percent
a. If the required rate of return is
8
percent, the project's NPV is
$nothing.
(Round to the nearest dollar.)
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