A project that requires a $ 100,000 investment yields $50,000 in 6 months and $50,000 in one year should be rejected for the following reasons:

Question

Quizplus · Accepted Answer

I. The cost of time is an important factor to consider when evaluating the profitability of an investment. By not incorporating it into the calculation, the total return on investment may be lower than initially anticipated.
II. The sum of the cash inflows following the investment being equal to the initial investment is not a reason to reject the project. However, it is important to consider the time value of money and other factors such as the risk of the investment, potential opportunity costs, and overall profitability.

A Project That Requires a $ 100,000 Investment Yields $50,000