Grace Corp., whose required rate of return is 10%, is considering the purchase of a new piece of equipment. The internal rate of return of the project, which has a life of 8 years, is 12%. The project would have:
A. an accounting rate of return greater than 10%.
B. a net present value of zero.
C. a net present value greater than zero.
D. a payback period more than 8 years.
Answer: C
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