Question: Use the following information to answer the next two questions. A manufacturing firm is deciding whether to invest in a new printer that needs an

Use the following information to answer the next two questions.A manufacturing firm is deciding whether to invest in a new printer that needs an initial investment of $150,000. This will increase cash flows in the first year by $80,000 and $75,000 in the second year.
If the cost of capital decreased to 1%, does the firm invest in the new technology?
a. Yes because the NPV = 0
b. Yes because the NPV > 0
c. No because the NPV < 0
d. Need information on the marginal benefits and costs

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b Yes because the NPV 0 The factor of cost of capital at 1 rate in each would be as below 1 st ... View full answer

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