You want to determine the internal rate of return of a project that generates non-equal cash flows over its life. By trial and error, you find that a discount rate of 14% yields a negative net present value, but a discount rate of 10% yields a positive net present value. The true rate of return must be:a) Greater than 14% or less than 10%b) less than 14% but greater than 10%c) greater than 14%d) cannot be determined from the given informationA company estimates it can save $1,400 per year in cash operating costs for the next 10 years if it buys a special-purpose machine at a cost of $5,500. No salvage value is expected. The company’s minimum rate of return is 14%.a) The investment is acceptable because the NPV is positiveb) The investment should be rejected because the NPV is negativec) The project is acceptable because the IRR is less than the cost of capital rated) The project should be rejected based on its IRRRefer to the above question. The NPV isa) $5,500b) $7,300c) $1,802d) ($1,802)
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