Question

A project that costs $3,500 to install will provide annual cash flows of $700 for the...

A project that costs $3,500 to install will provide annual cash flows of $700 for the next 7 years. The firm accepts projects with payback periods of less than 4 years.

a. What is this project's payback period? (Round your answer to 3 decimal places.)

b. Will the project be accepted?

  • No

  • Yes


c-1. What is project NPV if the discount rate is 3%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c-2. Should this project be pursued?

  • Yes

  • No


d-1. What is project NPV if the discount rate is 10%? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

d-2. Should this project be pursued?

  • Yes

  • No

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