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The Green Goddess Company is considering the purchase of a new machine that would increase the...

The Green Goddess Company is considering the purchase of a new machine that would increase the speed of manufacturing tires and save money. The net cost of the new machine is $60,000. The annual cash flows have the following projections

Year Cash Flow
1 $27,000
2 28,000
3 31,000
4 19,000
5 12,000

a. If the cost of capital is 12 percent, what is the NPV? (Round the final answer to the nearest whole dollar.)

NPV           $

b. What is the IRR? (Round the final answer to 2 decimal places.)

IRR             %

c. Should the project be accepted?

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Answer #1

NPV 27,377

IRR 31.27%

Accept the Project

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