Waste Industries is evaluating a $57,100 project with the following cash flows. ...
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Accounting
Waste Industries is evaluating a $57,100 project with the following cash flows.
| Years | Cash Flows | |||
| 1 | $ | 9,210 | ||
| 2 | 21,400 | |||
| 3 | 18,500 | |||
| 4 | 25,600 | |||
| 5 | 24,300 | |||
The coefficient of variation for the project is 1.223.
| Coefficient of Variation | Discount Rate | ||||||
| 0 | 0.25 | 5 | % | ||||
| 0.26 | 0.50 | 10 | % | ||||
| 0.51 | 0.75 | 12 | % | ||||
| 0.76 | 1.00 | 19 | % | ||||
| 1.01 | 1.25 | 20 | % | ||||
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Select the appropriate discount rate.
multiple choice 1
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5%
-
10%
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12%
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20%
-
19%
b. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
c. Based on the net present value should the project be undertaken?
multiple choice 2
-
Yes
-
No
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