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The following table presents information on a potential project currently being evaluated by XYZ. Which assertion about statement 1 and statement 2 is true? Expected
The following table presents information on a potential project currently being evaluated by XYZ. Which assertion about statement 1 and statement 2 is true?
Expected cash flows (number of years from today) | Cost of capital | ||||
0 | 1 | 2 | 3 | 4 | |
-59,000 | 31,000 | 21,000 | 14,000 | 7,000 | 10.7% |
Statement 1: XYZ would accept the project based on the projects net present value (NPV) and the NPV rule Statement 2: XYZ would accept the project based on the projects payback period and the payback rule if the payback threshold is 2.55 years
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