Question
A particular project that requires an upfront investment of $125,000 is found to have a net present value of $1.500. What can be said
A particular project that requires an upfront investment of $125,000 is found to have a net present value of $1.500. What can be said about this project? The project should be undertaken as it earns $1,500 in profit. The costs would also have to be examined to determine if it is worthwhile. The project should be undertaken as it provides a return that is greater than the company's cost of capital. The project is not worthwhile because $1,500 is probably not enough, given the initial investment required.
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