Question: A project requires a $ 9 0 0 , 0 0 0 investment and management has estimated it will have an internal rate of return

A project requires a $900,000 investment and management has estimated it will have an internal rate of return of 9.5% and an NPV of $85,000. The manager of the division who is contemplating this investment is currently operating the division at 10.2% return. The company's overall weighted-average cost of capital is 7.2%, and upper management has established a minimum required rate of return of 8.75. If the manager of the division has a short-run orientation, she may likely
accept this investment as its return exceeds the required rate of return.
accept this investment because the NPV is positive.
reject this investment because it will lower the manager's divisional return.
reject this investment because the investment will not generate additional profit for the division.
 A project requires a $900,000 investment and management has estimated it

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