Question
Determine the NPV for a project with the following cash flows: period 0 = -$900; period 1 = $200; period 2 = $200; period 3
Determine the NPV for a project with the following cash flows: period 0 = -$900; period 1 = $200; period 2 = $200; period 3 = $400; period 4 = $400; period 5 = -$100. If the per-period interest rate were 8% per year, should you take this project?
A) The NPV is not the best tool to identify whether the company should undertake a project or not.
B) The NPV is $200, which is a positive number. Therefore, this is a worthwhile project that you should accept.
C) The NPV is -$200. Therefore, this is a worthwhile project that you should reject.
D) The NPV is $0.14 which is a positive number. Therefore, this is a worthwhile project that you should accept.
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