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Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively.

Time: 0 1 2 3 4 5 6
Cash flow $7,200 $1,150 $2,350 $1,550 $1,550 $1,350 $1,150

Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)

NPV $

Should it be accepted or rejected?

Rejected
Accepted

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