Joe and Rich are both considering investing in a project with the following cash flows.Joe is content earning a 9 percent return,but Rich desires a return of 16 percent.Who,if either,should accept this project?
A)Joe, but not Rich
B)Rich, but not Joe
C)Neither Joe nor Rich
D)Both Joe and Rich
E)Joe, and possibly Rich, who will be neutral on this decision as his net present value will equal zero

Question

Joe and Rich are both considering investing in a project with the following cash flows.Joe is content earning a 9 percent return,but Rich desires a return of 16 percent.Who,if either,should accept this project? 
A)Joe, but not Rich 
B)Rich, but not Joe 
C)Neither Joe nor Rich 
D)Both Joe and Rich 
E)Joe, and possibly Rich, who will be neutral on this decision as his net present value will equal zero

Quizplus · Accepted Answer

Both Joe and Rich should accept the project as the NPV is positive at 9 and 16 percent.

Joe and Rich Are Both Considering Investing in a Project