Question: Net present value. Lepton Industries has three potential projects, all with an initial cost of $1,800,000. The capital budget for the year will allow Lepton
Net present value. Lepton Industries has three potential projects, all with an initial cost of $1,800,000. The capital budget for the year will allow Lepton to accept only one of the three projects. Given the discount rate and the future cash flow of each project in the following table, determine which project Lepton should accept.
| Cash Flow | Project Q | Project R | Project S | |||
| Year 1 | $500,000 | $600,000 | $1,000,000 | |||
| Year 2 | $500,000 | $600,000 | $800,000 | |||
| Year 3 | $500,000 | $600,000 | $600,000 | |||
| Year 4 | $500,000 | $600,000 | $400,000 | |||
| Year 5 | $500,000 | $600,000 | $200,000 | |||
| Discount rate | 10% | 13% | 16% | |||
Which project should Lepton accept? (Select the best response.)
A. None of the projects
B.Project S
C.Project Q
D.Project R
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