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Solve clearly Q (2) A water utility company is considering an investment project for a new water treatment plant. The cost of buying for the

Solve clearly
Q (2) A water utility company is considering an investment project for a new water treatment plant. The cost of buying for the new treatment plant will be $1500. The future inflows of cash expected from the project are $650 at Year 1, Year 2 and Year 3. The given interest rate for the company is only 5 percent. 1. Calculate the NPV of the project and decide whether the company should go ahead and invest. 2. Why use NPV as the tool to derive the decision above

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