Multiple Choice
Use the following setup for the next question.
A publisher is deciding whether or not to invest in a new printer.The printer would cost $900,and would increase the cash flows in year 1 by $500 and in year 3 by $800.Cash flows do not change in year 2.If the interest rate is 12%
-If the interest rate rises to 25% would the investment still take place?
A) Yes since NPV>0
B) No since NPV<0
C) Yes since the present value of the cash flows is greater than zero
D) No since the present value of the cash flows is lesser than zero
Correct Answer:
Verified
Correct Answer:
Verified
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