Question
Perez Inc. is considering a project that has an initial after-tax outlay or after-tax cost of $ 190,000 . The respective future cash inflows from
Perez Inc. is considering a project that has an initial after-tax outlay or after-tax cost of $ 190,000 . The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $40,000, $70,000 and $45,000.Perez uses the net present value method and has a discount rate of 12 %. WillPerez accept the project?
Group of answer choices
Perez rejects the project because the NPV is about -$12,375.60
Perez accepts the project because the NPV is greater than $20,000.00
Perez rejects the project because the NPV is about -$2,375.60
Perez rejects the project because the NPV is about -$35,046.46
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started