Question
Should a project be accepted if it offers an annual after-tax cash flow of $2 million indefinitely, costs $10 million, is riskier than the firm's
Should a project be accepted if it offers an annual after-tax cash flow of $2 million indefinitely, costs $10 million, is riskier than the firm's average projects, and the firm uses a 20% cost of capital for its average projects?
answers:
We cannot determine based on the information given.
No, since the NPV is zero.
Yes, since a zero NPV indicates marginal acceptability.
No, since the NPV is negative
Yes, since the NPV is positive.
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International financial management
Authors: Jeff Madura
13th edition
978-1337099738, 1337099732, 9781337515894, 1337515892, 978-1337587211
