Question
Dragonslayer Pest Control is looking at a project that will initially cost $5,500,000. The project will produce cash inflows of $1,800,000 (Year 1); $1,750,000 (Year
Dragonslayer Pest Control is looking at a project that will initially cost $5,500,000. The project will produce cash inflows of $1,800,000 (Year 1); $1,750,000 (Year 2); $1,700,000 (Year 3); $1,600,000 (Year 4); and $1,500,000 (Year 5). Dragonslayer has a mandatory policy stating that 5-year projects will ONLY be accepted if it generates an NPV greater than $30,000. Based on the policy, this project should be
Select one:
a. Rejected if discount rate is 16.00%
b. Rejected if discount rate is 16.05%
c. Rejected if discount rate is 16.10%
d. Accepted if discount rate is 16.15%
e. Accepted if discount rate is 16.20%
f. Accepted if discount rate is 16.25%
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