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Problem 10.39 Tyler, Inc., is considering switching to a new production technology. The cost of the required equipment will be $3,764,394. The discount rate is 13.01 percent. The cash flows that the firm expects the new technology to generate are as follows. Years CF $(3,764,394) 1-2 3-5 $878,248 6-9 $1,534,992 a. Compute the payback and discounted payback periods for the project. (Round answers to 2 decimal places, e.g. 15.25.) The payback for the project is years, and the discounted payback period is J years. b. What is the NPV for the project? Should the firm go ahead with the project? (Round answer to 2 decimal places, e.g. 15.25.) The NPV of the project is $ and using the NPV rule the project should be rejected c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decima accepted . 15.25.)

Problem 10.39 Tyler, Inc., is considering switching to a new production technology. The cost of the required equipment will be $3,764,394. The discount rate is 13.01 percent. The cash flows that the firm expects the new technology to generate are as follows. Years CF $(3,764,394) 1-2 3-5 $878,248 6-9 $1,534,992 a. Compute the payback and discounted payback periods for the project. (Round answers to 2 decimal places, e.g. 15.25.) The payback for the project is years, and the discounted payback period is J years. b. What is the NPV for the project? Should the firm go ahead with the project? (Round answer to 2 decimal places, e.g. 15.25.) The NPV of the project is $ and using the NPV rule the project should be rejected c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decima accepted . 15.25.)

Essentials Of Investments
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
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c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decimal places, e.g. 15.25.) The IRR of the project is %, and using the IRR rule the project should be Click if you would like to Show Work for this question: Open Show Work rejected accepted
Transcribed Image Text:c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decimal places, e.g. 15.25.) The IRR of the project is %, and using the IRR rule the project should be Click if you would like to Show Work for this question: Open Show Work rejected accepted
Problem 10.39 Tyler, Inc., is considering switching to a new production technology. The cost of the required equipment will be $3,764,394 . The discount rate is 13.01 percent. The cash flows that the firm expects the new technology to generate are as follows. Years CF $(3,764,394) 1-2 3-5 $878,248 6-9 $1,534,992 a. Compute the payback and discounted payback periods for the project. (Round answers to 2 decimal places, e.g. 15.25.) The payback for the project is years, and the discounted payback period is years. b. What is the NPV for the project? Should the firm go ahead with the project? (Round answer to 2 decimal places, e.g. 15.25.) The NPV of the project is $ and using the NPV rule the project should be rejected c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decima accepted . 15.25.)
Transcribed Image Text:Problem 10.39 Tyler, Inc., is considering switching to a new production technology. The cost of the required equipment will be $3,764,394 . The discount rate is 13.01 percent. The cash flows that the firm expects the new technology to generate are as follows. Years CF $(3,764,394) 1-2 3-5 $878,248 6-9 $1,534,992 a. Compute the payback and discounted payback periods for the project. (Round answers to 2 decimal places, e.g. 15.25.) The payback for the project is years, and the discounted payback period is years. b. What is the NPV for the project? Should the firm go ahead with the project? (Round answer to 2 decimal places, e.g. 15.25.) The NPV of the project is $ and using the NPV rule the project should be rejected c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decima accepted . 15.25.)
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