NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $28,570, and the project will yield cash inflows of $3,000 per year for 15years. The firm has a cost of capital of 9%.a. Determine the net present value (NPV) for the project.b. Determine the internal rate of return (IRR) for 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.)

Step 1: Given Value for Calculation Initial Investment = i = $28,570Cash Flow = cf = $3000Time = t =…

Answered: NPV and IRR Benson Designs has prepared…

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

Problem 1PS

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Vijay
A project has an initial cost of $ 55,000, expected net cash inflows of $10,000 per year for 10 years, and a cost of capital of 9%. What is the project's NPV ? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to the nearest cent.
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