expected to cost $$97,000$ per year in perpetuity. Assume all profits and expenses occur at the end of the year.

a$.$ What is the NPV of this investment if the cost of capital is $5\mathrm{.}8\%?$ Should the firm undertake the project? Repeat the analysis for discount rates of $1\mathrm{.}2\%$ and $17\mathrm{.}0\%,$ respectively.

b$.$ What is the IRR of this investment opportunity?

c$.$ What does the IRR rule indicate about this investment?

a$.$ What is the NPV of this investment if the cost of capital is $5\mathrm{.}8\%?$ Should the firm undertake the project? Repeat the analysis for discount rates of $1\mathrm{.}2\%$ and $17\mathrm{.}0\%,$ respectively.

If the cost of capital is $5\mathrm{.}8\%,$ the NPV will be $9.($Round to the nearest dollar.$)$

Should the firm undertake the project? $($Select the best choice below.$)$

A$.$ No$,$ because the NPV is less than zero.

B$.$ Yes, because the NPV is equal to or greater than zero.

C$.$ No$,$ because the NPV is not greater than the initial costs.

D$.$ There is not enough information to answer this question.

When $r=1\mathrm{.}2\%,$ the NPV will be $9,($Round to the nearest dollar.$)$

When $r=17\mathrm{.}0\%,$ the NPV will be $?.($Round to the nearest dollar.$)$

b$.$ What is the IRR of this investment opportunity? $($Select all the choices that apply.$)$

A$.$ There is at least one IRR between $5\mathrm{.}8\%$ and $17\mathrm{.}0\%.$

B$.$ There is at least one IRR between $1\mathrm{.}2\%$ and $5\mathrm{.}8\%.$

C$.$ From the answer to $($a$)$ there are at least two IRRs.

D$.$ There is only one IRR between $1\mathrm{.}2\%$ and $17\mathrm{.}0\%.$

c$.$ What does the IRR rule indicate about this investment? $($Select the best choice below.$)$

A$.$ Since at least one of the IRRs is higher than the discount rate, the IRR rule says to take the project.

B$.$ The IRR rule says nothing in this case because there are two IRRs.

C$.$ Since at least one of the IRRs is lower than the discount rate, the IRR rule says to not take the project.

D$.$ In this case, the IRR rule says you can either take or not take the project.