Describes a project with an initial cash outlay

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Reference no: EM13849250

The information below describes a project with an initial cash outlay of $10,000 and a required return of 12%.

After-tax cash inflow

Year 1 $6,000

Year 2 $2,000

Year 3 $2,000

Year 4 $2,000

Which of the following statements is correct?

A) The project should be accepted since its NPV is $353.87.

B) The project should be rejected since its NPV is -$353.87.

C) The project should be accepted since it has a payback of less than four years.

D) The project should be rejected since its NPV is -$23.91.

Reference no: EM13849250

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