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

Dora, dora and her family are driving to visit relatives for the holidays t... dora and her family are driving to visit relatives for the holidays they travel 174 miles in 3 hours if they travel at a constant speed how many miles do they travel in one hourest

What is the least number of students needed in a class, What is the least n... What is the least number of students needed in a class to be sure that at least 6 will receive similar grade if there are five probable grades A, B,C, D and F?  Ans: Let us re

Find the greatest number of 6 digits exactly divisible by 24, Find the grea... Find the greatest number of 6 digits exactly divisible by 24, 15 and 36. (Ans:999720) Ans: LCM of 24, 15, 36 LCM = 3 × 2 × 2 × 2 × 3 × 5 = 360 Now, the greatest six digit

Arc length and surface area revisited, Arc Length and Surface Area Revisite... Arc Length and Surface Area Revisited We won't be working any instances in this part.  This section is here exclusively for the aim of summarizing up all the arc length and su

096, -5+-6= -5+-6=

25 integer equations that equal 36, I need 25 integer equations that equal ... I need 25 integer equations that equal 36 please?

Find the surface area of each cylinder, I have no clue how to do it I have no clue how to do it

Factoring, how are polynomials be factored/? how are polynomials be factored/?

Example of binomial distribution, Example:  Joanne is given a four-question... Example:  Joanne is given a four-question multiple-choice quiz.  She hasnt studied the material to be quizzed, so she decides to answer the questions by randomly guessing the answe

Find the distance between the following pairs of points, p1(-3,-1),p2(9,4)... p1(-3,-1),p2(9,4)