T-Bone company is contemplating investing in a new piece of manufacturing machinery. The amount to be...
T-Bone company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $150,000. The present value of the future cash flows is $141,000. Should the company invest in this project?
a. yes, because net present value is +$9,000
b. yes, because net present value is – $9,000
c. no, because net present value is +$9,000
d. no, because net present value is – $9,000
Homework Answers
net present value =$141,000-$150,000
=-$9,000.
NPV is negative,So not accepted.
So the option is D.no, because net present value is – $9,000
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