Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $67,930, and the project will yield cash inflows of $9,000 per year for 12 years. The firm has a cost of capital of 14%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Would you recommend that the firm accept or reject the project?
Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $67,930, and the project will yield cash inflows of $9,000 per year for 12 years. The firm has a cost of capital of 14%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Would you recommend that the firm accept or reject the project?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $67,930, and the project will yield cash inflows of $9,000 per year for 12 years. The firm has a cost of capital of 14%.
a. Determine the net present value (NPV) for the project.
b. Determine the internal rate of return (IRR) for the project.
c. Would you recommend that the firm accept or reject the project?
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