A project requires an intial investment of $100,000 (at t = 0) and is expected to...
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A project requires an intial investment of $100,000 (at t = 0) and is expected to generate cash flows of $50,000 per year for the next 5 years (t =1 to t = 5). The present value of the 5 positive cash flows is around $ 187,150. The firm has a cost of capital of 10.5 percent. Should this project be accepted, and why? Use the Pl technique. OPI=0.87 < 1, reject PI=2,87> 1, accept OPI=1.87 > 1, accept PI= 1.52> 1, accept A project requires an intial investment of $100,000 (at t = 0) and is expected to generate cash flows of $50,000 per year for the next 5 years (t =1 to t = 5). The present value of the 5 positive cash flows is around $ 187,150. The firm has a cost of capital of 10.5 percent. Should this project be accepted, and why? Use the Pl technique. OPI=0.87 < 1, reject PI=2,87> 1, accept OPI=1.87 > 1, accept PI= 1.52> 1, accept
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Answer PI 187 1 accept The PI technique measures the ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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