Me Online, Inc. is considering a project that has an initial after-tax outlay or after-tax cost of $220,000. The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $60,000, $70,000 and $80,000. Sportswear Online uses the net present value method and has a discount rate of 11%. Will Sportswear Online accept the project?
a. Me Online rejects the project because the NPV is about - $22,375.73
b. Me Online accepts the project because the NPV is greater than $10,000.00
c. Me Online rejects the project because the NPV is about - $12,375.60
d. Me Online rejects the project because the NPV is about - $12,375.60
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Home » Business » Me Online, Inc. is considering a project that has an initial after-tax outlay or after-tax cost of $220,000. The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $60,000, $70,000 and $80,000.