Net present value calculation

Assignment Help Financial Management

Reference no: EM131579419

(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $110,000 and will generate net cash inflows of $16,000 per year for 11 years.

a. What is the project's NPV using a discount rate of 7 percent ?

Should the project be accepted? Why or why not?

b. What is the project's NPV using a discount rate of 14 percent? Should the project be accepted? Why or why not?

c. What is this project's internal rate of return? Should the project be accepted? Why or why not?

Reference no: EM131579419

Questions Cloud

Importance to an international manager : One of the first issues the chapter addresses is the rule of law. Explain this concept's importance to an international manager.

Describe new concept : Describe new concept(s), terms or ideas that can be learned from the following topics. The answer can be written in first person.

Concepts of disruptions-risks as they apply to transportion : Describe the concepts of disruptions and risks as they apply to transportation.

What is the incremental operating profit the firm : what is the incremental operating profit the firm can expect to earn from the ad? campaign?

Net present value calculation : What is the project's NPV using a discount rate of 7 percent ? What is this project's internal rate of return? Should the project be accepted? Why or why not?

Prove that g is bipartite with parts x and y : Let G be a connected graph with no odd cycles. Let x beavertex of G. Let X be all vertices at an even distance from x, and let Y be all vertices.

Write a paper critique of the article : Why did the authors use multiple regression? Do you think it's the most appropriate choice? Why or why not?

How soon should jane decide if a salesperson should retained : What should be the minimal performance that Jane should expect? How soon should Jane decide if a salesperson should be retained or terminated?

Write a script or narrative a divine command theorist : Write a script or narrative, where three out of the following five individuals-an Ethical Relativist, a Divine Command Theorist

User Account

All Pages