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Pina Colada Inc. is contemplating a capital project with a cost of $140000. The project will generate net cash flows of $46000 for yea
Pina Colada Inc. is contemplating a capital project with a cost of $140000. The project will generate net cash flows of $46000 for yea 1.$50000 for year 2 and $58000 for year 3. The asset has a salvage value of $9000 and straight-line depreciation will be used. The company's required rate of return is 10% Present Value PV of an Annuity Year of 1 at 10% of 1 at 10% 0.909 0.909 0.826 1.736 0.751 2.487 O acceptable because it has a positive NPV. unacceptable because it has a zero NPV C) acceptable because it has a return of greater than 10% O unacceptable because it earns a rate less than 10%
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