Help Oarling Manufacturing is evaluating a proposed capital budgeting project th

Question

Help Oarling Manufacturing is evaluating a proposed capital budgeting project that will require an initial investment of $108,000. The project is expected to generate the following net cash flows Year 2 $44,100 $40,400 Asame the desired rate of return on a project of this type is 10%, what is the net present value of this project? ·$18,304.10 O -$12,903.30 O $21,109.30 Suppose Daring Manufacturing has enough capital to fand the project, and the project is not competing for funding with other projects. Should Darling Manufacturing accept or reject this project? O Reject the project O Accept the project 2 8

Explanation / Answer

net present value

=-108000+35800/1.10^1+50200/1.10^2+44100/1.10^3+40400/1.10^4

=26759.77

the above is answer

2)

Accept this project as it has positive NPV.

the above is answer

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