NPV

Net present value calculation Big Steve makers of swizzle sticks is considering the purchase of a new plastic stampling machine. The investment requires an initial outlay of $90,000 and will generate net cash inflows of 16,000 per year for 9 years.

a.What is the projects NPV using a discount rate of 9 percent? Should the project be accepted? Why or why not?

b. What is the projects NPV using a discount rate of 17 percent? Should the project be accepted? why or why not?

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

a. if the discount rate is 9 percent then the projects NPV is   round to the nearest dollar

The project should be or not be ? accepted because the NPV is positive or negative? and therefore  does not add or add ? value to the form

b. IF discount rate is 17 percent then the projects NPV is ?  round to nearest dollar

The project should or should not be accepted ? because the NPV is positive or negative and therefore  adds or does not add value to the firm.

c. The project internal rate rate of return is round to two decimals

If the project required discount rate is 9% then the project should or should not be ? accepted because the IRR IS higher or lower than the required rate.

If the projects required discount rate is 17% then  the project  should or should not be? accepted because the IRR is higher or lower than the required duscount rate

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