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The green goddess company is considering the purchase of a

Problem

The Green Goddess Company is considering the purchase of a new machine that would increase the speed of manufacturing tires and save money. The net cost of the new machine is $45,000. The annual cash flows have the following projections.

Year        Cash flow
1             $15,000
2             20,000
3             25,000
4             10,000
5             5,000

a) If the cost of capital is 10 percent, what is the NPV?

b) What is the IRR?

c) Should the project be accepted? Why?

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