A project under consideration has a net present value of $5,000 for a required investment of $30,000. There are no other investment options at this time. However, the assumed discount rate used to calculate the net present value is 10%.
On the basis of this information alone, this project should:

Question

Quizplus · Accepted Answer

At a discount rate of 10%, the net present value of $5,000 is likely to be conservative unless the company's cost of capital is more than 10%. The project should probably be accepted.

A Project Under Consideration Has a Net Present Value of $5,000