Question: Gerard a not for profit entity is considering the acquisition
Gerard, a not- for- profit entity, is considering the acquisition of a baseball winder that costs $ 56,200. The baseball winder has an expected life of 10 years and is expected to reduce production costs by $ 9,000 a year. Gerard’s hurdle rate is 12 percent. What is the net present value of this project? Should Gerard undertake this investment? Why?
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