Net present value . Quark Industries has a project with the following projected cash flows: See data
Question:
Net present value.
Quark Industries has a project with the following projected cash flows: See data below.
a. Using a discount rate of 8% for this project and the NPV model, determine whether the company should accept or reject this project.
b. Should the company accept or reject it using a discount rate of 17%?
c. Should the company accept or reject it using a discount rate of 19%?
Question content area bottom
Part 1
a. Using a discount rate of 8%, this project should be accepted or rejected?
Part 2
b. Using a discount rate of 17%, this project should be accepted or rejected?
Part 3
c. Using a discount rate of 19%, this project should be rejected or accepted?
Initial cost: $280,000
Cash flow year one: $23,000
Cash flow year two: $78,000
Cash flow year three: $142,000
Cash flow year four: $142,000
Taxation for Decision Makers 2017
ISBN: 9781119373735
7th edition
Authors: Shirley Dennis-Escoffier, Karen Fortin