Question
Question 1 (20 points) a) You would like to invest in the following project. Year Cash Flow 0 -$58,500 1 $32,400 2 $38,500 Victoria, your
Question 1 (20 points) a) You would like to invest in the following project.
Year Cash Flow
0 -$58,500
1 $32,400
2 $38,500
Victoria, your boss, insists that only projects that can return at least $1.25 in todays dollars for every $1 invested can be accepted. She also insists on applying an 10% discount rate to all cash flows. Based on these criteria, should you accept the project and why? (5 points) b) A project costing $6,200 initially should produce cash inflows of $2,860 a year for three years. After the three years, the project will be shut down and will be sold at the
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