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a project that provides annual cash flows of $17,800 for eight years costs $84,000 today. what is the npv for the project if the required return is 7 percent? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) at a required return of 7 percent, should the firm accept this project? multiple choice 1 accept reject what is the npv for the project if the required return is 19 percent? (a negative answer should be indicated by a minus sign. do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) at a required return of 19 percent, should the firm accept this project? multiple choice 2

Sagot :

The NPV of the project when the required return is 7% is $22,289.11. The project should be accepted at a required return of 7%.

The NPV of the project when the required return is 19% is $-13,612.29. The project should not be accepted at a required return of 19%.

What is the NPV?

Net present value is the present value of after-tax cash flows from an investment less the amount invested. Only projects with a positive NPV are profitable and should be undertaken by the firm.

NPV when required return is 7% = -84,000 + 17,800 / 1.07 + 17,800 / 1.07² +  17,800 / 1.07³ +  17,800 / 1.07^4 +  17,800 / 1.07^5 +  17,800 / 1.07^6 +  17,800 / 1.07^7 +  17,800 / 1.07^8 = $22,289.11

NPV when required return is 19% = -84,000 + 17,800 / 1.19 + 17,800 / 1.19² +  17,800 / 1.19³ +  17,800 / 1.19^4 +  17,800 / 1.19^5 +  17,800 / 1.19^6 +  17,800 / 1.19^7 +  17,800 / 1.19^8 = $-13,612.29

To learn more about net present value, please check: https://brainly.com/question/25748668

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