FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. The present value of the future
cash flows generated by the project is $163,000. Should the company invest in this project?a. no, because therate of return on the project is less than the desired rate of return used to compute the present value of the future cash flowsb. yes, because the rate of return on the project exceeds the desired rate of return used to compute the present value of the future cash flowsc. no, because thenet present value is $17,000d. yes, because the rate of return on the project is equal to the desired rate of return used to compute the present value of the future cash flows
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