Any discount rate lower will yield a positive net present value, up to $126,000.

Part II.

For capital budgeting decisions, NPV is a better metric. NPV and IRR are very similar in many respects, and they carry the same reliance on the same underlying assumptions about the underlying cash flows. Additionally, they both relate to the company's cost of capital. IRR is typically used as a go/no-go threshold, whereas NPV measures the raw cash flows.

Ultimately, for most companies they objective is to generate superior returns for their shareholders. What NPV does that IRR does not do is consider the cash return of the project. With limited funds to go around, management will typically need to decided between a variety of different projects. Some will be approved and others will not be approved. In order to meet the needs of the shareholders, management needs to approve the projects that contribute...
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