part b

Windsor, a company that makes new furniture that has a worn look to it, has been struggling to keep up with its competitors. But the intern Igor has an idea: make some up-front investments in order to get customers' attention and then reap the rewards of a better product with a higher selling price. Since he's been studying capital budgeting at school, he's confident that he can present his idea and impress his boss with his insight and technical expertise. Here's the plan: - Invest $146,000 in updated equipment and inventory management technology to support the production of zero-defect products, where custom features can be reasonably added to any order on demand. - The new equipment and technology will have a useful life of 8 years, after which the assets will have no market value. - The assets will generate additional net cash inflows due to higher gross margins of $60,300 per year for the life of the assets, less additional operating cash outflows of $29,400 per year for persistent marketing efforts. Before pulling his proposal together, Igor finds out that the company is typically subject to a 24% tax rate. Further, the company has aiternative uses for its cash that would easily earn a 6% rate of return. Is Igor's plan financially viable? Determine the NPV of this proposal and explain what it means if your answer is either a negative or a positive amount. (Round present volue foctor calculations to 5 decimal places, eg. 1.25124 and final answer to 2 decimal places es. 5,125.36. Enter negative amounts using either a negative sizn preceding the number es. 45 or parentheses eg. (45).) NPV $ The planned investment financially viable. The NPN is which implies that the company will earn a 6% return on the investment. Determine the exact IRR for this investment, (Round answer to 2 decimal places e. . 15.25\%) IRR % Would Igor's proposal be acceptable to his boss based on this metric? Igor's proposal acceptable to his boss