You Would Like to Invest in the Following Project Victoria, Your Boss, Insists That Only Projects That Can Return

Multiple Choice

You would like to invest in the following project. $$\begin{array} { c c } \underline{\text { Year }} &\underline{ \text { Cash Flow }} \\ 0 & - \$ 55,000 \\1 & \$ 30,000 \\2 & \$37,000 \\\end{array}$$ 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%.