AlHessa Biotech is considering investing in a building project that will produce the cash flow seen...
AlHessa Biotech is considering investing in a building project that will produce the cash flow seen in the following table:
| n | Net Cash Flow |
| 0 | -50,000 |
| 1 | 25,000 |
| 2 | 15,000 |
| 3 | 25,000 |
MARR = 15%.
True or False: Based on net present worth analysis, it is better for the company NOT to invest in the building project and instead put the money in the investment pool.
true Or false?
Homework Answers
| time,n | cash flow |
| 0 | -50,000 |
| 1 | 25,000 |
| 2 | 15,000 |
| 3 | 25,000 |
since present worth of the building project is negative, it is better not to invest in this project
True
Based on net present worth analysis, it is better for the company NOT to invest in the building project and instead put the money in the investment pool.
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