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Net present value method Consider the case of Krause Corporation: Krause Corporation is evaluating a proposed capital budgeting project that will require an initial investment of $124,000

Finance Nov 27, 2020

Net present value method Consider the case of Krause Corporation: Krause Corporation is evaluating a proposed capital budgeting project that will require an initial investment of $124,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $38,200 Year 2 $50,600 Year 3 $45,300 Year 4 $42,400 Assume the desired rate of return on a project of this type is 10%. What is the net present value of this project? (Note: Do not round your intermediate calculations.) $15,539.79 $26,719.70 -$4,415.10 -$15,358.30 Suppose Krause Corporation has enough capital to fund the project, and the project is not competing for funding with other projects. Should Krause Corporation accept or reject this project? Reject the project Accept the project

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