1.) Your employees have estimated the net present value of project X to be $1.2

Question

1.) Your employees have estimated the net present value of project X to be $1.2 million. Their report says that they have not accounted for risk, but that with such a large NPV, the project should be accepted since even a risk-adjusted NPV would likely be positive. You have the final decision as to whether to accept or reject the project. What is your decision

Your employees have estimated the net present value of project X to be $1.2 million. Their report says that they have not accounted for risk, but that with such a large NPV, the project should be accepted since even a risk-adjusted NPV would likely be positive. You have the final decision as to whether to accept or reject the project. What is your decision

Explanation / Answer

The decision should be to accept the project as NPV is 1.2 million which can even after taking into account a risj adjusted the NPV will seems to be positive..

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