A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year 0 1 2 NPV Cash Flow What is the NPV for the project if the required return is 11 percent? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) -$ 28,600 12,600 15,600 11,600 At a required return of 11 percent, should the firm accept this project? NPV No Yes What is the NPV for the project if the required return is 25 percent? (A negative answer should be Indicated by a minus sign. Do not round Intermedlate calculations and round your answer to 2 decimal places, e.g., 32.16.) At a required return of 25 percent, should the firm accept this project? O Yes O NO
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year 0 1 2 NPV Cash Flow What is the NPV for the project if the required return is 11 percent? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) -$ 28,600 12,600 15,600 11,600 At a required return of 11 percent, should the firm accept this project? NPV No Yes What is the NPV for the project if the required return is 25 percent? (A negative answer should be Indicated by a minus sign. Do not round Intermedlate calculations and round your answer to 2 decimal places, e.g., 32.16.) At a required return of 25 percent, should the firm accept this project? O Yes O NO
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A firm evaluates all of its projects by applying the NPV decision rule. A project under
consideration has the following cash flows:
Year
0
1
2
3
NPV
Cash Flow
-$ 28,600
12,600
What is the NPV for the project if the required return is 11 percent? (Do not round
Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV
At a required return of 11 percent, should the firm accept this project?
O No
15,600
11,600
Yes
What is the NPV for the project if the required return is 25 percent? (A negative
answer should be Indicated by a minus sign. Do not round Intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
At a required return of 25 percent, should the firm accept this project?
O Yes
O NO
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