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Project Investment Accepted

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The James Company is considering investing in a new project. The
project's forecasted net cash flows are the following:
Year Project's Forecasted Net Cash Flows ($)
0 -150,000
1 2,000
2 8,000
3 15,000
4 35,000
5 20,000
6 30,000
7 11,000
8 14,000
9 18,000
10 60,000
The project's cost of capital is 11%. Should the project be accepted or not?
Why or why not?

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Solution Summary

The solution discusses whether a project investment should be accepted if the cost of capital is 11%.

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