Waste Industries is evaluating a $55,200 project with the following cash flows.
Years Cash Flows1 $9,100 2 19,000 3 21,500 4 20,200 5 31,900
The coefficient of variation for the project is .834.
Coefficient of Variation Discount Rate0-.25 4%.26-.50 7%.51-.75 10%.76-1.00 12%1.01-1.25 18%
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Select the appropriate discount rate.
4% 7% 10% 12% 18%
b. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
c. Based on the net present value should the project be undertaken?
No or Yes