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Altman Hydraulic Corporation will invest $158,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Some projects

Altman Hydraulic Corporation will invest $158,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Some projects may incur negative cash flows in later years, such as a mining project that may have to restore lands to their original condition after extracting the ore and when positive cash flows dwindle.)

Year Cash Flow
1 $49,000
2 59,000
3 (50,000)
4 54,000
5 110,000

a. What is the net present value of the project? (Round the intermediate calculations to the nearest whole dollar. Round the final answer to the nearest whole dollar. Negative answer should be indicated by a minus sign.)

Net present value $

b. Should the project be undertaken?

multiple choice

  • No

  • Yes

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