Firms/Producers: As a director of a company, you are responsible for determining whether to launch a new project. Your company is willing to invest $500,000 for a new project provided that it will make at least the equal amount in five years.

• Carefully evaluate the factors that you should consider in your financial decision making.
• Explain the difference between the PV and the net present value (NPV). What is your decision rule for a new project (using the NPV analysis, the internal rate of return [IRR] analysis, or the payback analysis)?
• How might other current economic factors such as the inflation rate, interest rates, and/or the stock/bond prices affect your decision?
• If you decide to launch a new project, describe what that would entail.