Should a Project Be Accepted If It Offers an Annual

Should a project be accepted if it offers an annual after-tax cash flow of $1,250,000 indefinitely, costs $10 million, is riskier than the firm's average projects, and the firm uses a 12.5% WACC?

A) Yes, since NPV is positive
B) Yes, since a zero NPV indicates marginal acceptability
C) No, since NPV is zero
D) No, since NPV is negative NPV = -10 million + $1.25 million/.125
= -10 + 10
= 0