Ted, a project manager, wants to invest in a project with an initial cost of $58,500 and cash flows of $32,400 and $38,500 in Years 1 and 2. Rosita, his boss, requires a discount rate of 10 percent and also a return of $1.10 in today's dollars for every $1 invested. Will Ted get his project approved? Why or why not?
A) Yes; because the NPV is positive
B) Yes; because the PI is greater than 1
C) Yes; because both criteria are met
D) No; because the project does not meet either requirement
E) No; while the project returns more than 10 percent it does meet $1.10 per $1 requirement.
E) No; while the project returns more than 10 percent it does meet $1.10 per $1 requirement.
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