4) A firm considers to buy a new 3D printer whose cost is $ 46 100....
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4) A firm considers to buy a new 3D printer whose cost is $ 46 100. The cost of 3D printer will be paid in 2023. The expected cash flows of this investment are as follows: 2024: $13 200 2025: $ 13200 2026: $13200 2027: $13 200 2028: $13 200 The firm plans to sell this 3D printer at the end of 2028 and expects that it can sell the 3D printer in the market for $ 20 000 (the salvage value of the 3D printer is $ 20 000) a) Find the Internal Rate of Return (IRR) of this project. b) Given that the current annual interest rate is 15% and the risk premium appropriate for this investment is 5%; should the firm accept or reject this investment. 4) A firm considers to buy a new 3D printer whose cost is $ 46 100. The cost of 3D printer will be paid in 2023. The expected cash flows of this investment are as follows: 2024: $13 200 2025: $ 13200 2026: $13200 2027: $13 200 2028: $13 200 The firm plans to sell this 3D printer at the end of 2028 and expects that it can sell the 3D printer in the market for $ 20 000 (the salvage value of the 3D printer is $ 20 000) a) Find the Internal Rate of Return (IRR) of this project. b) Given that the current annual interest rate is 15% and the risk premium appropriate for this investment is 5%; should the firm accept or reject this investment.
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Answer rating: 100% (QA)
To find the Internal Rate of Return IRR of the project we need to calculate the discount rate that m... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
Posted Date:
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