Problem:
Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an intial outlay of $95,000 and will generate net cash inflows of $19,000 per year for 11 years.
Requirement:
Question 1: What is the project's NPV using a discount rate of 7%? Should the project be accepted? Why or why not?
Question 2: What is the project's NPV using a discount rate of 13%? Should the project be accepted? Why or why not?
Question 3: What is this project's internal rate of return? Should the project be accepted? Why or why not?
Note: Please show basic calculation