$($Net present value$$ calculation$)$Big$$ Steve's, makers of swizzle$$ sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $$$$105$ comma $000$ and will generate net cash inflows of $$$$20$ comma $000$ per year for $8$ years.

a$.$What is the$$ project's NPV using a discount rate of $11$ percent$?$ Should the project be$$ accepted? Why or why$$ not?

b$.$What is the$$ project's NPV using a discount rate of $16$percent$?$ Should the project be$$ accepted? Why or why$$ not?

c$.$What is this$$ project's internal rate of$$ return? Should the project be$$ accepted? Why or why$$ not?

Question content area bottom

Part $1$

a$.$If the discount rate is $11$percent$,$ then the$$ project's NPV is $$$

$$

negative $2078.($Round to the nearest$$ dollar.$)$

Part $2$

The project

should not be

accepted because the NPV is

negative

and therefore

does not add

value to the firm.$($Select from the$$ drop$-$down menus.$)$

Part $3$

b$.$If the discount rate is $16$percent$,$ then the$$ project's NPV is $$$

$$

negative $18128.($Round to the nearest$$ dollar.$)$

Part $4$

The project

should not be

accepted because the NPV is

negative

and therefore

does not add

value to the firm.$($Select from the$$ drop$-$down menus.$)$

Part $5$

c$.$This$$ project's internal rate of return is

$$

$0\%.($Round to two decimal$$ places.$)$