Dax Co. is considering an investment with the following information. a. Compute the net present value of
Question:
Dax Co. is considering an investment with the following information.
a. Compute the net present value of the investment.
b. Determine whether the investment should be accepted on the basis of net present value.
Transcribed Image Text:
Present Value Present Value of Year Net Cash Flows of 1 at 12% Net Cash Flows 1.... $ 8,000 0.8929 2.. 10,000 0.7972 3. 12,000 0.7118 Totals... $30,000 Initial investment ... Net present value... (25,000) 2$
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a b Rejected The project should be rejected because its net present value ...View the full answer
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