The management of Douglass Corporation is considering the purchase of a new machine costing $375,000 with a 5-year useful life. The company's cost of capital rate is 6%. In addition to the foregoing information, use the following data in determining the acceptability in this situation:

Year Income from Operations Net Cash Flow

1 $18,750 $93,750

2 $18,750 $93,750

3 $18,750 $93,750

4 $18,750 $93,750

5 $18,750 $93,750

The net present value for this investment is:

Group of answer choices

Negative $296,018

Positive $296,018

Positive $19,913

Negative $19,913

None of the above

Flag question: Question 39Question 392.5 pts

The internal rate of return method is used to analyze a $750,000 capital investment proposal with annual net cash flows of $250,000 for each of the four years of its useful life.

To-Do: Calculate a present value factor for an annuity of $1 which can be used in determining the internal rate of return.

Group of answer choices

0.3333

2.000

3.000

Not enough information

Flag question: Question 40Question 402.5 pts

The internal rate of return method is used to analyze a $750,000 capital investment proposal with annual net cash flows of $250,000 for each of the four years of its useful life.

To-Do: Based on the factor determined in question #39 and present value of an annuity of $1 table presented below, determine the internal rate of return for the proposal.

Group of answer choices

4 and 6%

6 and 8%

8 and 10%

10 and 12%