what is the NPV of this investment if the cost of capital is 4.74 2 . How many IRR does this investment opportunity have? 3. can the IRR rule to evaluate this investment

Paula Nyika-Makore Homework: Chapter 7 Homework Score: 0 of 8 pts 7 of 8 (5 complete) P7-14 (similar to) HW Score Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $5,100,000. The product is expected to generate profits of $1,100,000 per yearf company will have to provide product support expected to cost $120,000 per year in perpetuity. Assume all income and expenses occur at the end of each year. a. What is the NPV of this investment if the cost of capital is 4.74%? Should the firm undertake the project? Repeat the analysis for discount rates of 2.70% and 2.72%, respectively. b. How many IRRs does this investment opportunity have? (Hint: Consider the two alternative discount rates we used in our analysis in part a.) w c. Can the IRR rule be used to evaluate this investment? Explain. a. What is the NPV of this investment if the cost of capital is 4.74%? If the cost of capital is 4.74% the NPV is $. (Round to the nearest dollar.) page at xlitemprod.pearsoncmg.com says Your session has ended. Your results have been saved. Click OK to return to your course. Paula Nyika-Makore & 1 03/08/21 2:00 AM Homework: Chapter 7 Homewor Sa Score: 0 of 8 pts OK HW Score: 41.46%, 17 of 41 P7-14 (similar to) Question Help Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $5,100,000. The product is expected to generate profits of $1,100,000 per year for ten years. The company will have to provide product support expected to cost $120,000 per year in perpetuity. Assume all income and expenses occur at the end of each year. a. What is the NPV of this investment if the cost of capital is 4.74%? Should the firm undertake the project? Repeat the analysis for discount rates of 2.70% and 2.72%, respectively. b. How many IRRs does this investment opportunity have? (Hint: Consider the two alternative discount rates we used in our analysis in part a.) c. Can the IRR rule be used to evaluate this investment? Explain. a. What is the NPV of this investment if the cost of capital is 4.74%? If the cost of capital is 4.74% the NPV is S (Round to the nearest dollar.)