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 0.475.

Coefficient of Variation				Discount Rate
0		0.25			7	%
0.26		0.50			9	%
0.51		0.75			13	%
0.76		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.)

c. Based on the net present value should the project be undertaken?

• No

• Yes