The annual cash flows have the following projections., Ask an Expert

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"Danforth Tire Company is considering the purchase of a new machine that would increase the speed of manufacturing and save money. The net cost of this machine is $66,000. The annual cash flows have the following projections.

Year Cash Flow
1..... $21,000
2..... 29,000
3..... 36,000
4..... 16,000
5..... 8,000

a. If the cost of capital is 10 percent, what is the net present value?

B What is the internal rate of return?

C Should the project be accepted? Why?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9284168

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