A project manager wants to invest in a project with an initial cost of $58,500 and cash flows of $32,400 and $38,500 in Years 1 and 2. The manager's employer requires a discount rate of 10 percent and also a return of $1.10 in today's dollars for every $1 invested. Will the project be approved? Why or why not? 1-No; because the project does not meet either requirement. 2-Yes; because both criteria are met. 3-Yes; because the Pl is greater than 1. 4-Yes; because the NPV is positive. 5-No; while the project returns more than 10 percent it does meet the $1.10 per $1 requirement.

A project manager wants to invest in a project with an initial cost of $58,500 and cash flows of $32,400 and $38,500 in Years 1 and 2. The manager's employer requires a discount rate of 10 percent and also a return of $1.10 in today's dollars for every $1 invested. Will the project be approved? Why or why not? 1-No; because the project does not meet either requirement. 2-Yes; because both criteria are met. 3-Yes; because the Pl is greater than 1. 4-Yes; because the NPV is positive. 5-No; while the project returns more than 10 percent it does meet the $1.10 per $1 requirement.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 12E: Refer to Exercise 19.11. 1. Compute the payback period for each project. Assume that the manager of...

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