Use the information below to answer Question#40:GIVEN: The XYZ Company is considering the following project with its corresponding financial data.The Company requires a 9% return from its investments.$ 500,000$ 200,000$ 225,000$ 245,000Initial investment:Expected Cash in-flow Year 1:Expected Cash in-flow Year 2:Expected Cash in-flow Year 3:Present Value Factor of 1 at 9%:n=1: 0.91743n=2: 0.84168n=3: 0.7721840) Choose from one of the following that accurately depicts this decision:A) This investment should not be considered because NPV is a negative $62,048B) This învestment should be considered because NPV equals positive $62,048C) This investment should be considered because the IRR for this investment is obviouslyless than its Required Rate of ReturnD) B and Care both correct

NPV is sum of present value of cash flows Present value of cash flow = Cash flow*Present value…

40) Choose from one of the following that accurately depicts this decision: A) This investment should not be considered because NPV is a negative $62,048 B) This investment should be considered because NPV equals positive $62,048 C) This investment should be considered because the IRR for this investment is obviously less than its Required Rate of Return D) B and C are both correct

40) Choose from one of the following that accurately depicts this decision: A) This investment should not be considered because NPV is a negative $62,048 B) This investment should be considered because NPV equals positive $62,048 C) This investment should be considered because the IRR for this investment is obviously less than its Required Rate of Return D) B and C are both correct

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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