Your company is considering an investment with the following expected cash flows

Question

Your company is considering an investment with the following expected cash flows: Initial Investment = $407,596 Operating Cash Flows = $73,428 per year Terminal Cash Flow = $11,872. The company's WACC is 11% for similar risk projects. The proposed project would have an expected life of 9 years. Your boss asks you to do the analysis. You would tell your boss this proposed project ___ because ____. (Points : 2) ---is acceptable; NPV is about $3,620---- ---- is acceptable; NPV is zero---- ---- should be rejected; NPV is about -$5,660 [negative $5,660].--- -----should be rejected; NPV is zero----

Explanation / Answer

Should be rejected NPV is zero

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