NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $9,670, and the project is expected to yield after-tax cash inflows of $3,000 per year for 5 years. The firm has a cost of capital of 8%. 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? a. The NPV of the project is $2308.132308.13. (Round to the nearest cent.) b. The IRR of the project is nothing%. (Round to two decimal places.)
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $9,670, and the project is expected to yield after-tax cash inflows of $3,000 per year for 5 years. The firm has a cost of capital of 8%. 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? a. The NPV of the project is $2308.132308.13. (Round to the nearest cent.) b. The IRR of the project is nothing%. (Round to two decimal places.)
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
Section: Chapter Questions
Problem 1PS
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NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is
cash inflows of
$9,670,
and the project is expected to yield after-tax $3,000
per year for
5
years. The firm has a cost of capital of
8%.
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?
a. The NPV of the project is
$2308.132308.13.
(Round to the nearest cent.)b. The IRR of the project is
nothing%.
(Round to two decimal places.)Expert Solution
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