Question
Whispering Winds Company is considering a long-term investment project called ZIP ZIP will require an investment of $130,000. It will have a useful life of
Whispering Winds Company is considering a long-term investment project called ZIP ZIP will require an investment of $130,000. It will have a useful life of four years and no salvage value. Annual cash inflows would increase by $81,000, and annual cash outflows would increase by $40,500. In addition, the company's required rate of return is 10%. Click here to view the factor table (a) Calculate the net present value on this project. (If the answer is negative, use either a negative sign preceding the number eg. -5,275 or parentheses eg. (5,275). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg. 1.25124 and final answer to 0 decimal places, eg. 5,275.) Net present value $ Identify whether the project should be accepted or rejected. The project should be (b) Calculate the internal rate of return on this project (Round answer to 1 decimal place, e.g. 5.2%) Internal rate of return 196 Identify whether the project should be accepted or rejected. The project should be
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Whispering Winds Company is considering a long-term investment project called ZIP. ZIP will require an investment of $130,000. It will have a useful life of four years and no salvage value. Annual cash inflows would increase by $81,000, and annual cash outflows would increase by $40,500. In addition, the company's required rate of return is 10%. Click here to view the factor table (a) Calculate the net present value on this project (if the answer is negotive, use either a negative sign preceding the number eg. 5,275 or parentheses eg. (5,275). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg 125124 and final answer to 0 derimal ploces, eg, 5,275 ) Identify whether the project should beaccepted orrejected. The projectshould be (b) Calculate the internal rate of return on this project (Round onswer to 1 decimal place, eg: 5.2\%) Identify whether the project should be accepted or rejected. The project should beStep by Step Solution
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