Question: The information below describes a project with an initial cash outlay of $10,000 and a required return of 12%. After-tax cash inflow Year 1 $6,000

The information below describes a project with an initial cash outlay of $10,000 and a required return of 12%.

After-tax cash inflow

Year 1 $6,000 Year 2 $2,000 Year 3 $2,000 Year 4 $2,000

Which of the following statements is correct?

A) The project should be accepted since its NPV is $353.87. B) The project should be rejected since its NPV is -$353.87. C) The project should be accepted since it has a payback of less than four years. D) The project should be rejected since its NPV is -$23.91.

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