FS) is evaluati a capital budgeting roject lat costs $75,00 PHFS's required rate of return is 14 percent. project is expected generate ter-tax cash flows equal $26,000 per year years. a. Compute the project's net present value (NPV). Do not round intermediate calculations. Round your answer to the nearest cent. Use a minus sign to enter a negative value, if any. $ b. Compute the project's internal rate of return (IRR). Round your answer to two decimal places. % c. Should the project be purchased? The project -Select- be purchased.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Piping Hot Food Services (PHFS) is evaluating a capital budgeting project that costs $75,000. The project is expected to generate after-tax cash flows equal to $26,000 per year for four years.
PHFS's required rate of return is 14 percent.
a. Compute the project's net present value (NPV). Do not round intermediate calculations. Round your answer to the nearest cent. Use a minus sign to enter a negative value, if any.
$
b. Compute the project's internal rate of return (IRR). Round your answer to two decimal places.
%
c. Should the project be purchased?
The project -Select- be purchased.
Transcribed Image Text:Piping Hot Food Services (PHFS) is evaluating a capital budgeting project that costs $75,000. The project is expected to generate after-tax cash flows equal to $26,000 per year for four years. PHFS's required rate of return is 14 percent. a. Compute the project's net present value (NPV). Do not round intermediate calculations. Round your answer to the nearest cent. Use a minus sign to enter a negative value, if any. $ b. Compute the project's internal rate of return (IRR). Round your answer to two decimal places. % c. Should the project be purchased? The project -Select- be purchased.
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