NPV for varying costs of capital Dane Cosmetics is evaluating
Question # 00467135
Posted By:
Updated on: 01/20/2017 05:11 AM Due on: 01/20/2017
6. NPV for varying costs of capital Dane Cosmetics is evaluating a new fragrance mixing machine. The machine requires an initial investment of $24,000 and will generate after-tax cash inflows of $5,000 per year for 8 years. For each of the costs of capital listed, (1) calculate the net present value (NPV) , (2) indicate whether to accept or reject the machine, and (3) explain your decision. a. The cost of capital is 10%. b. The cost of capital is 12%. c. The cost of capital is 14%.
-
Rating:
/5
Solution: NPV for varying costs of capital Dane Cosmetics is evaluating