The Green Goddess Company is considering the purchase of a new machine that would increase the speed of manufacturing tires and save money. The net cost of the new machine is $66,000. The annual cash flows have the following projections. (Use a Financial calculator to arrive at the answers.)

Year	Cash Flow
1	$28,000
2	28,000
3	28,000
4	33,000
5	11,000

a. If the cost of capital is 12 percent, what is the NPV? (Round the final answer to the nearest whole dollar.)

NPV $

b. What is the IRR? (Round the final answer to 2 decimal places.)

IRR %

c. Should the project be accepted?

• Yes

• No

Elgin Restaurant Supplies is analyzing the purchase of manufacturing equipment that will cost $21,000. The annual cash inflows are as follows. Use Appendix D.

Year	Cash Flow
1		$10,000
2		9,500
3		7,500

a. Determine the IRR using interpolation. (Round the intermediate calculations to the nearest whole dollar. Round the final answer to 2 decimal places.)

IRR %

b. With a cost of capital of 13 percent, should the machine be purchased?

• Yes

• No

c. With information from part b, compute the PI. (Round the final answer to 3 decimal places.)

PI