Question
Whispering Winds is contemplating a capital project costing $35823. The project will provide annual cost savings of $13800 for 3 years and have a salvage
Whispering Winds is contemplating a capital project costing $35823. The project will provide annual cost savings of $13800 for 3 years and have a salvage value of $2000. The companys required rate of return is 10%. The company uses straight-line depreciation. Present Value PV of an Annuity Year of 1 at 10% of 1 at 10% 1 .909 .909 2 .826 1.736 3 .751 2.487 This project is which of the following...unacceptable because it has a negative NPV. unacceptable because it earns a rate less than 10%. acceptable because it has a positive NPV. acceptable because it has zero NPV.
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