NPV and IRR Benson Designs has prepared the folowing estimates for a long term project it is considering The initial investment is $20 320, and the project will yield cash infows of $7.000 per year for 6 years The fes has a cost of capital of 10% Determine the net present value (PV) for the project Determine the internal rate of eum for the project Would you recommend that the firm accept or reject the project? The NPV of the project is (ou to the cent

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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NPV and IRR Benson Designs has prepared the following estimates for a long som project it is considering The intal investment is $26.320, and the project will yield cash inflows of 57,000 per year for 6
years. The firm has a cost of capital of 10%
a. Determine the not present value (NPV) for the project
b. Determine the internal rate of reum(R) or the project
c. Would you recommend that the firm accept or reject the project?
a. The NPV of the project is (Round to the nearest cent)
Transcribed Image Text:NPV and IRR Benson Designs has prepared the following estimates for a long som project it is considering The intal investment is $26.320, and the project will yield cash inflows of 57,000 per year for 6 years. The firm has a cost of capital of 10% a. Determine the not present value (NPV) for the project b. Determine the internal rate of reum(R) or the project c. Would you recommend that the firm accept or reject the project? a. The NPV of the project is (Round to the nearest cent)
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