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

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Finance

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

YearCash Flow
0–$34,000
115,000
217,000
313,000
What is the NPV of the project if the required return is 11percent? (Do not round intermediate calculations and roundyour answer to 2 decimal places, e.g., 32.16.)
At a required return of 11 percent, should the firm accept thisproject?

  • Yes

  • No

What is the NPV of the project if the required return is 24percent? (A negative answer should be indicated by a minussign. Do not round intermediate calculations and round your answerto 2 decimal places, e.g., 32.16.)

At a required return of 24 percent, should the firm accept thisproject?  

  • Yes

  • No

Answer & Explanation Solved by verified expert
3.9 Ratings (786 Votes)
Present Value Future value 1rt where r is the interest rate that is 11 and t is the time period in years Net present value NPV initial investment sum of present values of future cash flows Year 0 1 2 3 cash flow    See Answer
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