Suppose Your Firm Is Considering Investing in a Project with the Cash

question 85

Multiple Choice

Suppose your firm is considering investing in a project with the cash flows shown as follows,that the required rate of return on projects of this risk class is 8 percent,and that the maximum allowable payback and discounted payback statistics for the project are three and a half and four and a half years,respectively.Use the NPV decision to evaluate this project; should it be accepted or rejected?

• A)NPV = $1,766.55; accept the project
• B)NPV = $892.19; accept the project
• C)NPV = $1,288.94; accept the project
• D)NPV = -$104.73; reject the project

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