Suppose your firm is considering investing in a project with the cash flows show

Question

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, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: 5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Answer is complete but not entirely correct. NPV $ 10,261.66 Should it be accepted or rejected? accepted rejected

Explanation / Answer

NPV = 2323.92

Since NPV is Positive it should be accepted.

Best of Luck. God Bless
Please Rate Well

A B C D E F G 1 Year 0 1 2 3 4 5 6 2 Cash Flow -5000 1200 2400 1600 1600 1400 1200 3 Discount Rate 8% NPV 2323.92 NPV using EXCEL formula=NPV(A3,B1:G1)+A2

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.