A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested

Question:

A 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 generated by the project is $145,000. Should they invest in this project?
A - yes, because the rate of return on the project exceeds the desired rate of return used to calculate the present value of the future cash flows.
B - no, because the rate of return on the project is less than the desired rate of return used to calculate the present value of the future cash flows.
C - no, because is +$5,000D -
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.
Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...