Question: The required return is 15%. How long should you run the project? 1 year 2 years 3 years The project should be rejected. Cash flows

The required return is 15%. How long should you run the

The required return is 15%. How long should you run the project?

		1 year
		2 years
		3 years
		The project should be rejected.

Cash flows (in millions) are shown for a project that can be run three years, but can be terminated early after each of the first two years. Year Cash Flows: No Early Cash Flows: Terminate Cash Flows: Terminate Termination after two years after one year 140 140 |-140 1 180 80 125 0 2 2 150 180 150

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