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Consider the previous question with the following details: A company is considering a project that will last for 4 years with no residual value.
Consider the previous question with the following details: A company is considering a project that will last for 4 years with no residual value. The project has the following cash flows and details: Period 0: Cash flow = -$165,000 (Cost of project) Period 1: Cash flow = $85,000, Net Income = $47,500 Period 2: Cash flow = $66,000, Net Income = $28,500 Period 3: Cash flow = $50,000, Net Income = $12,500 Period 4: Cash flow = $50,000, Net Income = $12,500 Average Book Value = $75,000 The required annual return on projects of this risk is 8%. The company is trying to determine whether or not to accept this project. If they use the net present value (NPV) method of evaluation, will they accept the project? O A. Yes, they will accept. O B. No, they won't accept.
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