A business is considering a project with an initial investment of $160,000 and annual cash inflows of $24,000 per year for seven years. The company's cost of capital is 12 percent. Factors for a 12 percent interest rate for seven years are shown below:

Present Value of $1 0.452

Present Value of an Annuity 4.564

Based on the companys net present value (NPV) calculation, the company should:

Responses

reject the proposal since the NPV is ($50,464).

invest in the proposal since the NPV is $50,464.

reject the proposal since the NPV is ($109,536).

invest in the proposal since the NPV is $109,536.