Compute if the project is acceptable

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Reference no: EM132933705

ABC Co. is considering an investment opportunity having cash flows as described below:

Project III would require a cash outlay of $10,000 now and would provide a cash inflow of $30,000 eight years from now.

Required:

Problem 1: If ABC Co. has a required rate of return of 14%, determine if the project is acceptable. Use the NPV method.

A. Not acceptable, because NPV is ($10,000)
B. Yes acceptable, because NPV is $10,530
C. It doesn't matter because NPV is $0
D. Yes acceptable, because NPV is $530

Reference no: EM132933705

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