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:
Year Cash Flow
0 â€“$ 34,000
1 15,000
2 17,000
3 13,000
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?Â Â
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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