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 8 years. a.What is the​ project's NPV using a discount rate of 8%? Should the project be​ accepted? Why or why​ not?   b.What is the​ project's NPV using a discount rate of 17%?   Should the project be​ accepted? Why or why​ not?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 2PA: Jasmine Manufacturing is considering a project that will require an initial investment of $52,000...
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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 8 years.

a.What is the​ project's NPV using a discount rate of 8%?

Should the project be​ accepted? Why or why​ not?
 
b.What is the​ project's NPV using a discount rate of 17%?
 
Should the project be​ accepted? Why or why​ not?
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