Question: this section. Question 2 Sandstone, Inc. is considering a four-year project that has an initial after-tax outlay or after- tax cost of $100,000. The future

this section. Question 2 Sandstone, Inc. is considering a four-year project that has an initial after-tax outlay or after- tax cost of $100,000. The future cash inflows from its project are $40,000, $40,000, $30,000 and $30,000 for years 1, 2, 3 and 4, respectively. Sandstone uses the net present value method and has a discount rate of 16%. a. Will Sandstone accept the project if the firm uses the NPV rule explain? (8 marks) b. What is the modified internal rate of return for this project? (7 marks)

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