The Quick-Start Company Has the Following Pattern of Potential Cash $17 \%$

question 68

Multiple Choice

The Quick-Start Company has the following pattern of potential cash flows with its planned investment in a new cold weather starting system for fuel injected cars.


If the company has a discount rate of $17 \%$ , should it decide to invest?

• A)yes, NPV = €2.2 million
• B)yes, NPV = €21.6 million
• C)no, NPV = -€1.9 million
• D)yes, NPV = € 8.6 million
• E)No, since more than one branch is NPV = 0 or negative, the firm must reject.

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