Question: A) Solar Solutions, Inc., is trying to evaluate a power generation project with the following expected cash flows: Year Cash Flows 0 ($1,000,000) 1 $400,000

A) Solar Solutions, Inc., is trying to evaluate a power generation project with the following expected cash flows:

Year

Cash Flows

0

($1,000,000)

1

$400,000

2

$450,000

3

$500,000

Assume that net cash flows occur at the end of each period and that this project produces no additional costs or revenues beyond year 3.

What is the NPV for the project if the company requires a return of 10.0%? Round your answer to the nearest whole dollar amount.

B) If Solar Solutions demands a minimum return on investment (ROI) of 9.5% on long-term projects, should it accept or reject the project described?

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