Considering the purchase of new plastic stamping machine

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Reference no: EM13874638

Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000 and will generate net cash inflows of $20,000 per year for 9 years.

1. If the discount rate is 17%, then the projects NPV is ___? (round to the nearest dollar) Should the project be accepted and why or why not?

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

Reference no: EM13874638

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