Question: M22-8 Calculating Net Present Value and Predicting the Internal Rate of Return Otis Company has the following information about a potential capital investment: Initial investment

M22-8 Calculating Net Present Value and Predicting the Internal Rate of Return Otis Company has the following information about a potential capital investment: Initial investment $400,000 Annual cash inflow $ 70,000 Expected life 10 years Cost of capital 11% 1. Calculate and evaluate the net present value of this project. 2. Without any calculations, explain whether the internal rate of return on this project is more or less than 11 percent.

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