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Determine if Project B can be included in the capital budget, if the cost of your...

Determine if Project B can be included in the capital budget, if the cost of your initial investment is 11% and generates the following cash flows:

    Project B
0 -125
1 20
2 30
3 50
4 50
5 60
      
Can be selected, as it has an NPV of $22.47
      
He should not be selected, as his NPV is negative.
      
Can be selected, because he has an NPV of $30.47
      
Should not be selected, because your NPV is less than the initial investment.
      
May be selected because all cash flows produced by the project are positive.

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Answer #1

The project can be selected as it has an NPV of $22.47.

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