Waste Industries is evaluating a $70,000 project with the following cash flows.
| Years |
Cash Flows |
| 1 |
$11,000 |
| 2 |
$16,000 |
| 3 |
$21,000 |
| 4 |
$24,000 |
| 5 |
$30,000 |
The coefficient of variation for the project is 0.847.
Based on the following table of risk-adjusted discount rates, should the project be undertaken? Select the apporpriate discount rate and then compute the net present value.
| Coefficient of Variation |
Discount Rate |
| 0 - 0.25 |
6% |
| 0.26 - 0.50 |
8% |
| 0.51 - 0.75 |
10% |
| 0.76 - 1.00 |
14% |
| 1.01 - 1.25 |
20% |