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Consider this question: With consideration to the above question, answer the following question: A company is considering a project that will last for 4 years
Consider this question:
With consideration to the above question, answer the following question:
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%. (Round to the nearest dollar and do NOT use commas in your response) What is the net present value of the project? NPV $ 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? A. Yes, they will accept. OB. No, they won't acceptStep by Step Solution
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