. A firm evaluates all of its projects by using the NPV decision rule. At a requ
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Question
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A firm evaluates all of its projects by using the NPV decision rule. At a required return of 10 percent, the NPV for the following project is $___________ and the firm should accept / reject the project. At a required return of 29 percent, the NPV is $____________ and the firm should reject / accept the project. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))
A firm evaluates all of its projects by using the NPV decision rule. At a required return of 10 percent, the NPV for the following project is $___________ and the firm should accept / reject the project. At a required return of 29 percent, the NPV is $____________ and the firm should reject / accept the project. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))
Explanation / Answer
Year cash flows discount factor @ 10% Present value 0 ?$27,000 1 23,000 0.909 20907 2 16,000 0.826 13216 3 9,000 0.751 6759 40882 NPV @ 10 % discount factor = 13882 Year cash flows discount factor @ 29% Present value 0 ?$27,000 1 23,000 $0.78 17940 2 16,000 $0.60 9600 3 9,000 $0.47 4230 NPV @ 29% discount factor = $4770
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