A project that costs $2500 to install will provide annual cash flows of $600 for the next 6 yrs. The firm accepts projects with payback periods of less than 5 years. Will the project be accepted? Should this project be pursued if the discount rate is 2%? What if the discount rate is 12%? Will the firm's decision change as the discount rate changes?© BrainMass Inc. brainmass.com February 24, 2021, 2:29 pm ad1c9bdddf
Yes, the project would be accepted at a discount rate of 2% as the NPV at year 5 is $328, which means a ...
The project would be accepted at a discount rate of 2%