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
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
T-Bone company is contemplating investing in a new piece of manufacturing machinery. The amount to be...
Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. The present value of the future cash flows generated by the project is $163,000. Should they invest in this project? a. yes, because the rate of return on the project is equal to the desired rate of return used to calculate the present value of the future cash flows b. no, because net present value is +$17,000 c. no, because the rate of return...
A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $210,000. The present value of the future cash flows is $225,000. The company’s desired rate of return used in the present value calculations was 12%. Which of the following statements is true? Select one: a. The project should not be accepted because the net present value is negative. b. The internal rate of return on the project is less than 12%. c....
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