0 1 2 3 4 | | | | | Project A - $1,275,000 $450,000 $475,000 $500,000 $500,000

Lamesa Lamp and Dcor Shop wants to open a new location. The initial cost estimate and cash flows for the proposed expansion are given above. Should the new expansion project be accepted or rejected if the firms cost of capital is 15.0 percent? No cash flows are projected after year 4. A. NPV (negative)- $48,527 IRR 17.2 percent B. NPV (negative)- $48,527 IRR 12.6 percent C. NPV (positive)$90,107 IRR13.8 percent D. NPV (positive)$90,107 IRR18.4 percent E. NPV (positive)$105,239 IRR21.3 percent