Question: 3 Part Question, please answer all 3 parts to get thumbs up! 1.a) Econo-Cool Air Conditioners cost $500 to purchase and results in an electricity
3 Part Question, please answer all 3 parts to get thumbs up!
1.a) Econo-Cool Air Conditioners cost $500 to purchase and results in an electricity bill of $200 per year. The Econo-Cool Air Conditioners lasts for 7 years. The discount rate is 19%. What is the equivalent annual cost? (Round to 2 decimal places)
1.b) Growth Enterprises believes its latest project, which will cost $40,000 to install, will generate a perpetual growing stream of cash flows. The cash flow at the end of the first year will be $3,500, and cash flows in future years are expected to grow indefinitely at an annual rate of 3%. If the discount rate for the project is 13%, what is the project NPV? (round to 2 decimal places)
c) With the same above problem, what is the internal rate of return (IRR) for the project? (Note the answer is in terms of percentage. Please round to 2 decimal places if necessary)
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