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Wall Of Cool wants to start a new project. It will involve designing and selling wall-size refrigerators for commercial purposes. It would be necessary to
Wall Of Cool wants to start a new project. It will involve designing and selling wall-size refrigerators for commercial purposes. It would be necessary to immediately invest $1,450,000 toward this long-term project. The company's research team came up with the following estimates: a net cash inflow of $92,000 after taxes would be received at the end of the first year of the project. The research team's estimates also suggest that these cash flows would be growing at 4 percent each year into indefinite future. a-1 Calculate the NPV for Wall Of Cool's project if the estimated riskiness of the project requires a 11 percent annual return. (Type the minus sign if your NPV is negative. Do not round intermediate calculations and only round your final answer to 2 decimal places, e.g., 32.16.) NPV this a-2At the 11 percent risk-adjusted required return, Wall Of Cool should investment project. Reject O Accept b. In addition, let's calculate one more thing. The annual growth of 4 percent of the project's annual cash flows may not be precise. And so Wall Of Cool gave its research team one more task: at which annual growth rate would the project "break even"? For these calculations, assume that the required return remains unchanged at 11 percent. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., type 32.16 if you got 32.16%.) Constant growth rate %
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