The quick-start company has the following pattern of potential cash flows with it planned investment in a new cold weather starting system for fuel injected cars.
-If the company has a discount rate of 17%, should it decide to invest?
A) yes, NPV = $2.2 million
B) yes, NPV = $21.6 million
C) no, NPV = -$1.9 million
D) yes, NPV = $8.6 million
E) No, since more than one branch is NPV = 0 or negative, the firm must reject.
Correct Answer:
Verified
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