IMA CMA Part 2: Strategic Financial Management Exam CMA-Strategic-Financial-Management Question # 6 Topic 1 Discussion

IMA CMA Part 2: Strategic Financial Management Exam CMA-Strategic-Financial-Management Question # 6 Topic 1 Discussion

CMA-Strategic-Financial-Management Exam Topic 1 Question 6 Discussion:
Question #: 6
Topic #: 1

K Malone is a successful entrepreneur, Currently she is considering investing in a capital protect, which would benefit tourism in North Caroina Because of tourism, the State of North Carolina is willing to lent) her $150,000 at a rate of 5%. well below the market rate Her estimated net cash flows for the 3-year lifetime of the project are S15 000 $89,000 and $60,000 respectively Recommend whether or not Malone should undertake this project.


A.

She should undertake this project because the present value (PV) of this project is $146,843


B.

She should undertake this project because the net present value (NPV) is $31,022.


C.

She should not undertake this project because the net present value NPV is ($14.051).


D.

She should not undertake this protect because the net present value (NPV) is ($3.157)


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