Compute internal rate of return and the net present value

Reference no: EM131324664

A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firm's cost of capital is 12 percent.

a. Compute the internal rate of return and the net present value.

b. Should the firm accept or reject the project?

Reference no: EM131324664

Questions Cloud

Explain 2 solutions that are good for witness intimidation : Write a 4 page paper on witness intimidation.- Explain 2 solutions that are good for witness intimidation.- Give the opposing side of witness intimidation.

Should the firm undertake the training program : The marginal tax rate for the firm is 40 percent. Based on the net present value criterion, should the firm undertake the training program

What are the causes and origins of this disease : Physiological basis for this disease: Talk about the healthy state of the body. For instance, if you are talking about cirrhosis of the liver explain how the liver works when it is healthy. If you are talking about tuberculosis then explain how..

Generate five descriptive statements from the case study : Generate five descriptive statements from the case study descriptions of the library. Generate five prescriptive statements from the case study descriptions of the library.

Compute internal rate of return and the net present value : The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent.

Write the nursing school required reflective journal essay : Write the given "nursing school required" reflective journal essay.- How to apply personal thought and reflections on it and make it an academic paper.

Human testis produce testosterone and its function : State which cells in a human testis produce testosterone and its function(s) and state which hormones are produced by a human ovary, and their functions.

Summarize the film - mad max fury road : The papers are each worth (60) points and the due dates are included in the class schedule toward the end of this syllabus. The papers all have the same four points for you to answer: Summarize the Film

How did researchers approach the specific research question : what is your topic? why did you choose it? what is known about it? what is unknown about it?how did researchers approach the specific research question? what did their findings bring to the table?

User Account

All Pages