Question: You are considering whether to launch a new product and want to determine the financial feasibility. If you undertake the project, it will cost $

You are considering whether to launch a new product and want to determine the financial feasibility. If
you undertake the project, it will cost $10,000 to launch and the new product will generate annual net cash flows of
$5,000, $4,000, $3,000 and $1,000 during the first four years, respectively. You will finance the project with debt and
equity and your cost of capital for the project is 10%. Which statement below is incorrect? (This question is worth 2
points.)
a) The project is financially feasible.
b) The net present value of the project is approximately $788.20.
c) The net present value of the project is approximately $788.20, so the project is financially feasible.
d) The net present value of the project is approximately $788.20, so the project is financially feasible, and should
be accepted.
e) The internal rate of return generated by the project exceeds the required rate of return.
f) The internal rate of return generated by the project is approximately 14.49%.
g) The companys return on the project is approximately 4.49%.
h) No statement is incorrect.

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