6. A capital investment has a net present value of $1 000 at a rate of return of 10 percent. At a 12 percent rate of return, the net present value of the investment is $100. At a 14 percent rate of return, the net present value of the investment is $0. Under what circumstance should the project be rejected? When the required rate of return: а. exceeds 12 percent b. is less than 12 percent C. exceeds 14 percent d. is less than 14 percent
6. A capital investment has a net present value of $1 000 at a rate of return of 10 percent. At a 12 percent rate of return, the net present value of the investment is $100. At a 14 percent rate of return, the net present value of the investment is $0. Under what circumstance should the project be rejected? When the required rate of return: а. exceeds 12 percent b. is less than 12 percent C. exceeds 14 percent d. is less than 14 percent
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
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