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A firm evaluates all of its projects by applying the NPV decision rule. A project under
consideration has the following cash flows:
0
1
2
3
($34,000)
$15,000
$17,000
$13,000
The firm applies a 14% discount rate to all new investment projects.
a. What is the NPV of the project?
b. Should the firm accept or reject the project?
0
1
2
3
($34,000)
$15,000
$17,000
$13,000

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A firm evaluates all of its projects by applying the NPV decision r.pdf

  • 1. A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: 0 1 2 3 ($34,000) $15,000 $17,000 $13,000 The firm applies a 14% discount rate to all new investment projects. a. What is the NPV of the project? b. Should the firm accept or reject the project? 0 1 2 3 ($34,000) $15,000 $17,000 $13,000