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A project has an NPV of $500,302, a cost of $714,000, and a first year projected cash flow of $112,600. Should the firm pursue the project?Select an answer:No, because NPV is less than cost.Yes, because NPV is greater than 0.No, because NPV less than WACC.Yes, because projected cash flow is positive in year 1.

Question

A project has an NPV of 500,302,acostof500,302, a cost of 714,000, and a first year projected cash flow of $112,600. Should the firm pursue the project?Select an answer:No, because NPV is less than cost.Yes, because NPV is greater than 0.No, because NPV less than WACC.Yes, because projected cash flow is positive in year 1.

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Solution

Yes, because NPV is greater than 0.

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