Pan bottling co is considering purchasing a new machine to, Financial Management

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Pan bottling co is considering purchasing a new machine to

Pan bottling co is considering purchasing a new machine to increase the speed of bottling and save money. The net cost of the machine is $60,000. The annual cash flows have the following projections:

Year 1 cash flow $23,000

Year 2 cash flow $26,000

Year 3 cash flow $29,000

Year 4 cash flow $15,000

Year 5 cash flow $8,000

A. If the cost of capital is 13%, what is the net present value of selecting a new machine?

B. What is the internal rate of return? Please show work

C. Should the project be accepted and why?

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