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

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 8P

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