Please answer the below questions.
Question 1. Compare and contrast, NPV, PI, and EVA. Which evaluation method would you prefer and why?
Question 2. What is the project manager's goal in selecting projects for the firm? How does the capital budgeting process help in accomplishing those goals?
Question 3: (Net Present value calculation) Big Steve's makers of swizzle stickers, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $90,000 and will generate net cash inflows of $16,000 per year for 8 years.
a. What is the project's NPV using the discount rate of 11%? Should the project be accepted? Why or why not?
b. What is the project's NPV using a discount rate of 16%? Should the project be accepted? Why or why not?
c. What is the project's internal rate of return? Should the project be accepted? Why or why not?
Question 4: If the discount rate is 11 percent, then the project's NPV is $___ (round to the nearest dollar).
The project (should not be or should be) accepted because the NPV is (negative or positive) and therefore (adds or does not add) value to the firm.