Problem: ABC Industries has a project with the following projected cash ?ows: Initial Cost, Year 0: $240,000 Cash ?ow year one: $27,000 Cash ?ow year two: $77,000 Cash ?ow year three: $146,000 Cash ?ow year four: $151,000
a. Using a 12% discount rate for this project and the Net present value (NPV) model, determine whether the company should accept or reject this project?
b. Should the company accept or reject it using a 21% discount rate and the Net present value (NPV) model?