Considering the purchase of new plastic stamping machine

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Reference no: EM131182826

Big Steve's makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $110,000 and will generate net cash inflows of $17,000 for 9 years.

a) What is the project's NPV using a discount rate of 8%? Should this project be accepted? Is the NPV positive or negative?

b) What is the projects NPV using a discount rate of 14%? Should this project be accepted? Is the NPV positive or negative?

c) What is the projects internal rate of return? _______

1) If the project's required discount rate is 8% should the project be accepted? Is the IRR Higher/Lower than the discount rate?

2) If the project's required discount rate is 14% should the project be accepted? Is the IRR Higher/Lower than the discount rate?

Reference no: EM131182826

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Considering the purchase of new plastic stamping machine : Big Steve's makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $110,000 and will generate net cash inflows of $17,000 for 9 years. What is the project's NPV using a d..

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