Question: Lepton Industries has a project with the following projected cash flows: Initial Cost, Year 0: $468,000 Cash flow year one: $135,000 Cash flow year two:
Lepton Industries has a project with the following projected cash flows:
Initial Cost, Year 0: $468,000
Cash flow year one: $135,000
Cash flow year two: $240,000
Cash flow year three: $185,000
Cash flow year four: $135,000
a. Using an 8% discount rate 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 14% discount rate?
c. Should the company accept or reject it using a 20% discount rate?
Initial Cost, Year 0: $468,000
Cash flow year one: $135,000
Cash flow year two: $240,000
Cash flow year three: $185,000
Cash flow year four: $135,000
a. Using an 8% discount rate 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 14% discount rate?
c. Should the company accept or reject it using a 20% discount rate?
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a NPV 468000 135000108 240000108 2 185000108 3 135000108 4 NPV 468000 12500000 20576132 146... View full answer
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