Solution-Solve the net present value and internal rate of

Solve the net present value and internal rate of return

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Reference no: EM132507942

Calculating NPV and IRR Using Excel. Pete's Plumbing Supplies would like to expand into a new warehouse at a cost of $500,000. The warehouse is expected to have a life of 20 years, and a salvage value of $100,000. Annual costs for maintenance, insurance, and other cash expenses will total $60,000. Annual net cash receipts resulting from this expansion are predicted to be $115,000. The company's required rate of return is 12 percent.

Required:

Question a. Use Excel to calculate the net present value and internal rate of return in a format similar to the Computer Application spreadsheet shown in the chapter.

Question b. Should the company purchase the warehouse? Explain.

Reference no: EM132507942

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Solve the net present value and internal rate of return

Reference no: EM132507942

Reference no: EM132507942

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