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P9-7
Net present value.
Quark Industries has a project with the following projected cash flows:
a.

Using a discount rate of 9%

for this project and the NPV model, determine whether the company
should accept or reject this project.
b.
%?

Should the company accept or reject it using a discount rate of 17

c.
%?

Should the company accept or reject it using a discount rate of 18

P9-8 (similar to)
Net present value. Lepton Industries has a project with the following
projected cash flows:
Initial cost: $470,000
Cash flow year one: $121,000
Cash flow year two: $260,000
Cash flow year three: $181,000
Cash flow year four: $121,000
a.
Using a discount rate of 9% for this project and the NPV model,
determine whether the company should accept or reject this project.