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Should the product be introduced

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Reference no: EM131315842

Webster's wants to introduce a new product that has a startup cost of $15,000. The product has a 2-year life and will provide cash flows of $12,700 in Year 1 and $6,300 in Year 2. The required rate of return is 10 percent. Should the product be introduced? Why or why not?

A. No; The PI is .90.

B. Yes; The IRR is 19.74 percent.

C. Yes; The NPV is $851.24.

D. Yes; The PI is 1.04.

E. No; The IRR is 8.78 percent.

Reference no: EM131315842

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