Question: You are considering a project A which has cash flows given below: Year 0 Year 1 Year 2 Project A ($8,000) $50,000 ($50,000) Project A's
You are considering a project A which has cash flows given below: Year 0 Year 1 Year 2 Project A ($8,000) $50,000 ($50,000) Project A's cost of capital is 15%. Which of the following statements best describes Project A? (Hint: draw NPV profile) . Two of the statements are consistent with Project A. The project should be rejected at its current cost of capital The project's NPV profile starts with a negative NPV at the cost of capital of 0%. If both IRRs were greater than its cost of capital, it should be accepted. No matter what its cost of capital is, it should be rejected
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