You Would Like to Invest in the Following Project

question 3

Multiple Choice

You would like to invest in the following project.
Camille,your boss,insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted.She also insists on applying a 10% discount rate to all cash flows.Based on these criteria,you should:

• A)accept the project because it returns almost $1.22 for every $1 invested.
• B)accept the project because it has a positive PI.
• C)accept the project because the NPV is $2,851.
• D)reject the project because the PI is 1.05.
• E)reject the project because the IRR exceeds 10%.

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