NPV and IRR: Equal Annual Net Cash Inflows Winter Fun Company is evaluating a capital...
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NPV and IRR: Equal Annual Net Cash Inflows Winter Fun Company is evaluating a capital expenditure proposal that requires an initial investment of $66,338, has predicted cash inflows of $15,000 per year for seven years, and has no salvage value.
a. Using a discounted rate of 14 percent, determine the net present value of the investment proposal.
Use a negative sign with your answer, if appropriate. $Answer
b. Determine the proposal's internal rate of return. (Refer to Appendix 25B if you use the table approach.)
Round to the nearest percent. (Example: 0.1568 = 15%) Answer
%
c. What discount rate would produce a net present value of zero? Answer
%
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