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A business undertakes high-risk investments and requires a minimum expected rate of return of 17% pa on its investments. A proposed capital investment has the
- A business undertakes high-risk investments and requires a minimum expected rate of return of 17% pa on its investments. A proposed capital investment has the following expected cash flows:
Year $
0 (50,000)
1 18,000
2 25,000
3 20,000
4 10,000
State, on financial grounds alone, whether this project should go ahead.
Note: You should calculate the NPV of the project at a cost of capital of 15% and 20%
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