Question: please answer all the following questions (Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping

please answer all the following questions (Net present value calculation) Big Steve's,please answer all the following questions

(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 $95,000 and will generate net cash inflows of $17,000 per year for 11 years. a. What is the project's NPV using a discount rate of 7 percent? Should the project be accepted? Why or why not? b. What is the project's NPV using a discount rate of 17 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? a. If the discount rate is 7 percent, then the project's NPV is $ 32,477. (Round to the nearest dollar.) The project should be accepted because the NPV is positive and therefore adds value to the firm. (Select from the drop-down menus.) b. If the discount rate is 17 percent, then the project's NPV is $ (Round to the nearest dollar.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!