Question
You would like to invest in the following project. Year 0 - -$55,000 year 1 - $30,000 year 2 - $37,000 Victoria, your boss, insists
You would like to invest in the following project.
Year 0 - -$55,000
year 1 - $30,000
year 2 - $37,000 Victoria, your boss, insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted. She also insists on applying a 10% discount rate to all cash flows. Based on these criteria, you should: A. accept the project because it returns almost $1.22 for every $1 invested. B. accept the project because it has a positive PI. C. accept the project because the NPV is $2,851. D. reject the project because the PI is 1.05. E. reject the project because the IRR exceeds 10%.
*show all formulas and steps please
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