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An independent capital budgeting project has a net investment of $1 million and is expected to generate net cash flows of $300,000 annually for 5

An independent capital budgeting project has a net investment of $1 million and is expected to generate net cash flows of $300,000 annually for 5 years. The required rate of return is 18 percent.

a, Compute the net present value. b. Compute the profitability index. c. Should the project be accepted?

A.

a. $938,151.31 b. 0.94 c. Yes

B.

a. -$61,848.69 b. 0.94 c. Yes

C.

a. $938,151.31 b. 0.94 c. No

D.

a. -$61,848.69 b. 0.94 c. No

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