Question
Managers at Even Flow Instruments Inc. are considering three projects that will each cost $4,000. Project A will return $2,000 each year for 3 years,
Managers at Even Flow Instruments Inc. are considering three projects that will each cost $4,000. Project A will return $2,000 each year for 3 years, Project B will return $1,000 each year for 5 years, and Project C will return $5,000 in 1 year. If available capital is $8,000 and the cost of capital is 10%, which projects should be selected using the NPV maximization method?
| a. | (A) and (C) only. | |
| b. | (A) only. | |
| c. | (C) only. | |
| d. | All three projects. | |
| e. | (A) and (B) only |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
