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Waste Industries is evaluating a $55,500 project with the following cash flows. Years Cash Flows 1 $ 9,120 2 20,200 3 26,600 4 16,300 5

Waste Industries is evaluating a $55,500 project with the following cash flows. Years Cash Flows 1 $ 9,120 2 20,200 3 26,600 4 16,300 5 26,300 The coefficient of variation for the project is .475. Coefficient of Variation Discount Rate 0 .25 7 % .26 .50 9 % .51 .75 13 % .76 1.00 16 % 1.01 1.25 19 % Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Select the appropriate discount rate. 7% 19% 13% 9% 16% b. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value $ c. Based on the net present value should the project be undertaken? No Yes

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