A firm evaluates all of its projects by applying the NPV decision rule. A project under...

90.2K

Verified Solution

Question

Finance

A firm evaluates all of its projects by applying the NPVdecision rule. A project under consideration has the following cashflows:

Year Cash Flow
0 –$ 28,800
1 12,800
2 15,800
3 11,800

What is the NPV for the project if the required return is 10percent? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)

  NPV $

At a required return of 10 percent, should the firm accept thisproject?
Yes
No

What is the NPV for the project if the required return is 26percent? (Negative amount should be indicated by a minussign. Do not round intermediate calculations and round your answerto 2 decimal places, e.g., 32.16.)

  NPV $

At a required return of 26 percent, should the firm accept thisproject?

Answer & Explanation Solved by verified expert

4.1 Ratings (539 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

A firm evaluates all of its projects by applying the NPVdecision rule. A project under consideration has the following cashflows: YearCash Flow0–$28,800112,800215,800311,800 What is the NPV for the project if the required return is 10percent? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.) NPV$ At a required return of 10 percent, should the firm accept thisproject?YesNo What is the NPV for the project if the required return is 26percent? (Negative amount should be indicated by a minussign. Do not round intermediate calculations and round your answerto 2 decimal places, e.g., 32.16.) NPV$ At a required return of 26 percent, should the firm accept thisproject?