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Problem 22-07 An investment with total costs of $8,000 will generate total revenues of $9,000 for one year. Use Appendix B to answer the questions.
Problem 22-07
An investment with total costs of $8,000 will generate total revenues of $9,000 for one year. Use Appendix B to answer the questions. Use a minus sign to enter negative values, if any. Round your answers to the nearest dollar.
If funds cost 14 percent, the NPV is $ .
What would be your advice to management?
The investment SHOULD NOT be made.
Would your answers be different if the cost of capital is 12 percent?
If funds cost 12 percent, the NPV is $ .
The investment SHOULD be made.
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