What is the npv of investment

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A new machine will cost $100,000 today and generate cash inflows of $25,000 each year for 5 years.

(a) If the firm has a 10% cost of capital, what is the NPV of this investment? Should the firm buy this machine under the NPV rule? (Please explain your reason)

(b) How high can the discount rate be before you would reject buying this machine? (Please explain the reason. Your answer should have at least one decimal digit)

(c) What is the payback period of this investment?

Reference no: EM133075960

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