A business has the opportunity to expand by purchasing a machine at a cost of £80,000.
The machine has an estimated life of 5 years and is projected to generate a cashflow of £20,000 each year end, with no scrap value.
Given the current level of interest rates an appropriate discount rate is regarded to be 7%.
(a) Calculate the NPV of this project.
(b) Calculate an approximate Internal Rate of Return for this investment (to the nearest 1%).
(c) Given a discount rate of 7% at what level of annual cashflow would this project become unviable?

Posted Date: 7/19/2012 12:47:59 PM | Location : United States

Ask an Expert

Related Discussions:- Net Present Value, Assignment Help, Ask Question on Net Present Value, Get Answer, Expert's Help, Net Present Value Discussions

Write discussion on Net Present Value
Your posts are moderated

Write your message here..

Related Questions

Fractions, The bowling alley suggests selecting a ball that is 1/7 of the b... The bowling alley suggests selecting a ball that is 1/7 of the bowlers weight. If the bowler weighs 84 pounds, how much should the bowling ball weigh?

What are the basic elements of reasoning, What are the Basic Elements of Re... What are the Basic Elements of Reasoning ? There are four basic elements used in geometry. If we say studying geometry is like building a house, then these elements are like d

What are the angles of depression from observing position, In Figure, what ... In Figure, what are the angles of depression from the observing positions O 1 and O 2 of the object at A?

Find the co ordinates of p such that ap =3/7 ab and p lies, If A & B are (-... If A & B are (-2,-2) and (2,-4) respectively, find the co ordinates of P such that AP =3/7 AB and P lies on the line segment AB.

Unitary method, who discovered unitary method who discovered unitary method

Using pythagorean theorem solve z 2 = ( x + y )2 + 3502, Two people on bik... Two people on bikes are at a distance of  350 meters.  Person A begin riding north at a rate of 5 m/sec and 7 minutes later on Person B begin riding south at 3 m/sec.  Determine th

Marketig research report , need help to write Marketing research reprot abo... need help to write Marketing research reprot about IBM company using spss (statistical program) to analys the given data about the company and write the report according to given i

How did rousseau resolve the conflict, How did Rousseau resolve the conflic... How did Rousseau resolve the conflict between the rights of the individual and the responsibilities of government (the state)? How did the ideas about universal education and socia

Differential equations, Find the normalized differential equation which has... Find the normalized differential equation which has {x, xex} as its fundamental set

Radius of convergence - sequences and series, Radius of Convergence We ... Radius of Convergence We will be capable to illustrate that there is a number R so that the power series will converge for, |x - a| R.  This number is known as the radius of