Cellular Labs will invest $150,000 in a project that will not begin to produce returns until after the third year. From the end of the 3rd year until the end of the 12th year (10 periods), the annual cash flow will be $40,000. If the cost of capital is 12 percent, should this project be undertaken?
A) Find the net present value of the investment described.
B) B) Hypothetically, if the investment described had an internal rate of return of 14%, what would its net present value be? Discuss your answer.