Transcribed Image Text: Generro Company Is considering the purchase of equipment that would cost $36,000 and offer annual cash Inflows of $10,500 over Its useful life of 5 years. Assuming

Transcribed Image Text: Generro Company Is considering the purchase of equipment that would cost $36,000 and offer annual cash Inflows of $10,500 over Its useful life of 5 years. Assuming a desired rate of return of 12%, Is the project acceptable? (PV of $1 and PVA of $1) (Use appropriate
factor(s) from the tables provlded.)
Multiple Choice
No, since the negative net present value indicates the investment will yield a rate of return below the desired rate of return.
Yes, since the investment will generate $52,500 in future cash flows, which is greater than the purchase cost of $36,000.
Yes, since the positive net present value indicates the investment will eam a rate of return greater than 12%.
The answer cannot be determined.
1214 AM

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