Math-NPV

Net Present Value
Big Steve's makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $110,000 and will generate net cash inflows of $17,000 per year for 11 years.

a. what is the projects NPV using a discount rate of 11%?
b. what is the projects NPV using a discount rate of 17%?
What is this projects internal rate of return?

  1. 👍
  2. 👎
  3. 👁
  1. You want NPV, using

    NPV(.11,11) = -110000 + sum(t=1 to 11) 17000/(1+.11)^t
    = -110000 + 105510.76 = -4489.24

    NPV(.17,11) = -110000 + 82219.03 = -27780.97

    the IRR is r where

    sum(t=1 to 11) 17000/(1+r) = 110000
    r = 10.08%

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. Language

    which sentence has proper subject-verb agreement? even my cousin steve feel sad today. even my cousin steve look sad today. even my cousin steve feels sad today.*** even my cousin steve looking sad today.

  2. Math

    It took Steve and his construction crew 8 months to build a house. Alfter expenses, he was left with $24,872.67 himself. on average, how much did Steve make per month? Round to the nearest dollar.

  3. math

    You make a purchase at a local hardware store, but what you've bought is too big to take home in your car. for a small fee, you arrange to have the hardware store deliver your purchase for you. You pay for your purchase, plus the

  4. Reading

    Read the excerpt from Monster. STEVE I don’t remember seeing him play ball. PETROCELLI You having trouble remembering what you’ve seen? STEVE No, but I’ve seen a lot of ball games. I watch a lot of ball games. PETROCELLI Are

  1. Algebra

    Steve is making bags of mixed nuts. Almonds are $5 per pound & Cashews are $12 per pound. Steve charges $56 per 7 pound bag. 1. Write a system of equations that can be used to determine how many pounds of almonds & how many pounds

  2. Finance

    Steve and Ed are cousins who were both born on the same day, and both both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve on his 20th birthday, and he just made a 6th payment into the

  3. math

    Steve McSpoke left home on his bicycle at 8am, traveling at 18km/h. At 10am, Steve's brother set out after him on a motorcycle, following the same route. The motorcycle traveled at 54km/h. How long had steve traveled when his

  4. Math

    By Moving Only 2 sticks of these three equal sized squares cna be changed into 4 equal sized rectangles. which 2 sticks should be moved?

  1. Math

    It took Steve and his construction crew 8 months to build a house. Alfter expenses, he was left with $24,872.67 himself. on average, how much did Steve make per month? Round to the nearest dollar. I know the answer is $3,109.08

  2. accounting

    The lag between purchase date and the date at which payment is due is known as the "terms lag". The lag between the due date and the date on which the buyer actually pays is termed the "due lag", and the lag between the purchase

  3. math foundations 20

    How do I solve normal distribution word problems? Ex A manufacturer offers a warranty on it's coffee makers. The coffee makers have mean lifespan of 4.5 years, with standard deviation of 0.7 yeaes. For how long should the coffee

  4. math

    Steve is participating in a cross county bike race. Every 2 hours he travels between 42 and 54 miles. Four hours ago, Steve had traveled 56 miles from the start of the race. Which is a reasonable measure of Steve's distance from

You can view more similar questions or ask a new question.