4. Net present value method

Darling Engineering is evaluating a proposed capital budgeting project that will require an initial investment of $180,000. The project is expected to generate the following net cash flows:

Year	Cash Flow
1	$46,600
2	$52,000
3	$49,500
4	$49,400

Assume the desired rate of return on a project of this type is 9%. The net present value of this project is:

-20,261.06

-377,500.00

17,500.00

197,500.00

Suppose Darling Engineering has enough capital to fund the project, and the project is not competing for funding with other projects. Should Darling Engineering accept or reject this project?

Reject the project

Accept the project