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Hinesight Llc is evaluating a proposed capital budgeting project that will require an initial investment of $156,000. The project is expected to generate the following
Hinesight Llc is evaluating a proposed capital budgeting project that will require an initial investment of $156,000. The project is expected to generate the following net cash flows:
Year | Cash Flow |
---|---|
1 | $43,000 |
2 | $51,400 |
3 | $47,700 |
4 | $46,400 |
Assume the desired rate of return on a project of this type is 10%. The net present value of this project is-5,865.18
Suppose Hinesight Llc. has enough capital to fund the project, and the project is not competing for funding with other projects. Should Hinesight Llc. accept or reject this project?
Accept the project
Reject the project
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