Webster,Inc

question 12

Multiple Choice

Webster,Inc.is considering an eight-year project that has an initial after-tax outlay or after-tax cost of $180,000.The future after-tax cash inflows from its project for years 1 through 8 are the same at $35,000.Webster uses the net present value method and has a discount rate of 12%.Will Webster accept the project?

• A)Webster accepts the project because the NPV is over $10,000.
• B)Webster accepts the project because the NPV is about $6,141.
• C)Webster rejects the project because the NPV is about -$6,133.
• D)Webster rejects the project because the NPV is below -$7,000.

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