A company is looking at investing in Project A. They have determined that their cost...
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Finance
A company is looking at investing in Project A. They have determined that their cost of capital is 7.0% and the calculated NPV of the projected net cashflows at their cost of capital equals $58,000. You are also given that the only negative net cash flow occurs at time 0.
Which of the following statements is/are true?
(I) The internal rate of return (IRR) of the projected cashflows is more than 7%.
(II) The company should consider investing in Project A.
- A.
I only
- B.
II only
- C.
I and II
- D.
Neither statement is true
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