Victoria, Your Boss, Insists That Only Projects That Can Return

Multiple Choice

$$\begin{array}{l}\text { You would like to invest in the following project. }\\\begin{array} { | l | l | } \hline \text { Year } & \text { Cash Flow } \\\hline 0 & - £ 55,000 \\\hline 1 & £ 30,000 \\\hline 2 & £ 37,000 \\\hline\end{array}\end{array}$$ Victoria, your boss, insists that only projects that can return at least £1.10 in today's dollars for every £1 invested can be accepted.She also insists on applying a 10% discount rate to all cash flows.
Based on these criteria, you should:

A) accept the project because it returns almost £1.22 for every £1 invested.
B) accept the project because it has a positive PI.
C) accept the project because the NPV is £2,851.
D) reject the project because the PI is 1.05.
E) reject the project because the IRR exceeds 10% .