Assume the following for a project under evaluation:

The

project's life is 4 years.

The

total time zero, initial cost of $55,000.

The

total net operating cash flow each year is $15,000.

In

addition to the terminal year operating cash flow,

there is a nonoperating,

terminal year cash flow of

$8,000.

If the cost of capital for a project of this risk is 7%, what

is the project's NPV? Accept or reject the project?

123,000 accept

13,000 accept

56,911

reject

1,911 accept

13,355 accept