Problembig stevies is the maker of swizzle sticks they are, Ask an Expert

Finance

Problem:

Big Stevie's is the maker of swizzle sticks, they are considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $90,000 and will generate net cash inflows of $21,000 a year for 9 years.

Required:

Question 1: What is the projects NPV using a discount rate of 9%? Should project be accepted? Why or why not.

Question 2: What is the projects NPV using a discount rate of 14%? Should project be accepted? Why or why not.

Question 3: What is this projects internal rate of return? Should it be accepted? Why or why not.

Note: Please show how to work it out.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163140

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