Problem:
The New Orleans Pelicans need to decide whether the organization should take on a renovation project for their training complex. According to the net present value (NPV) capital budgeting approach, what should the organization do assuming a cost of capital of 9% and the following projected cash flows? [FV = PV × (1+r)^n] and [PV = FV ÷ (1+r)^n] Year Cash Flow 0 ($1,000,000) 1 $200,000 3 $300,000 4 $350,000 5 $300,000 Question 17 Select one: A. The NPV is $400,000. The Pelicans should accept the project. B. The NPV is -$126,490. The Pelicans should not accept this project since it would not be profitable for the organization. C. The NPV is $194,979. The Pelicans should accept the capital project. D. None of these are correct. E. The NPV is $68,490. The Pelicans should accept the project.