Problem:
Big steve's makers of swizzle tickets is considering the purchase of a new plastic stamping machine. this investment requires an initial outlay of $110,000 nd will generate net cash inflows of $16,000 per year for 8 yers.
Required:
Question 1: What is the projected NPV using a discount rate of 9%? Should their project be accepted? Why or why not?
Question 2: What is the projected NPV using a discount rate of 14%? Should their project be accepted? Why or why not?
Question 3: What is the projects internal rate of return? Should their project be accepted? Why or why not?
Note: Provide support for your rationale.