Practice fer Hemework 9(C ?McGraw Ha connect Homework 9 ICh Search 9 (Ch 13) 6 S

Question

Practice fer Hemework 9(C ?McGraw Ha connect Homework 9 ICh Search 9 (Ch 13) 6 Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent Cash flowl-$7,300 $1,120 S2, 320 S.?20 S.520 $1,320 #1,120 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal pleces Should it be accepted or rejected? O rejected O accepted K Prev 2 of Scoe er > 8

Explanation / Answer

Time Cash flow Discounting factor @ 8% 0 -7300 1 (7,300.00) 1 1120 0.925926     1,037.04 2 2320 0.857339     1,989.03 3 1520 0.793832     1,206.63 4 1520 0.73503     1,117.25 5 1320 0.680583         898.37 6 1120 0.63017         705.79 -345.9067 NPV ($345.91) The project should be rejected since NPV is negative

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