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lii lii
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3 years ago
Analysts at Tabby Fur Storage predict that the net present value of a proposed new $10 million warehouse is $1 million. How should these findings be interpreted?

▸ Although NPV is positive, its value is too low for such a large expenditure and as a result, the project should be rejected.

▸ The project should be rejected because the NPV is less than the cost of the warehouse.

▸ The project should be accepted because it will add value to the firm.

▸ More information such as the payback period should be evaluated since the reliance on only one capital budgeting technique should be discouraged.

▸ The project does not meet the acceptance criteria of the NPV method and should be rejected.
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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gma_of_7gma_of_7
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3 years ago
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lii Author
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3 years ago
Brilliant ツ
cartoon
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Yesterday
Thanks for your help!!
momochiime
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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