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A company is looking at investing in Project A. They have determined that their cost...

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Finance

A company is looking at investing in Project A. They have determined that their cost of capital is 7.0% and the calculated NPV of the projected net cashflows at their cost of capital equals $58,000. You are also given that the only negative net cash flow occurs at time 0.

Which of the following statements is/are true?

(I) The internal rate of return (IRR) of the projected cashflows is more than 7%.

(II) The company should consider investing in Project A.
  • A. Neither statement is true
  • B. II only
  • C. I only
  • D. I and II

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