A Machine Has a Cost of $5,575,000

question 83

Multiple Choice

A machine has a cost of $5,575,000. It will produce cash inflows of $1,825,000 (Year 1) ; $1,775,000 (Year 2) ; $1,630,000 (Year 3) ; $1,585,000 (Year 4) ; and $1,650,000 (Year 5) . At a discount rate of 16.25%, the project should be

• A) accepted.
• B) rejected.
• C) discounted at a lower rate.
• D) abandoned after the first year.

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