Sister Pools has an aftertax cost of capital of 10 percent. The company is considering...
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Sister Pools has an aftertax cost of capital of 10 percent. The company is considering building and selling water fountains. The initial cash outlay for this project would be $70,000. The expected net cash inflows are estimated to be $10,000 a year for ten years. Should Sister Pools start and invest in the project? Why? A. Yes, because the company will get $100,000 of net cash flows and it is more than the $70,000 cost. OB. Yes, because the NPV of the project is $30,000 and it is positive. OC. Yes, because the IRR of the project is 11 percent and it is more than the 10 percent. OD. No, because the IRR of the project is 8.9 percent and it is less than the 10 percent. O E. No, because the NPV of the project is -$8,554.33 and it is negative
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