The cash flows and Net salvage value of Project X is given the following table: Year...

The cash flows and Net salvage value of Project X is given the following table:

Year	Cash flows	Salvage Value
0	-5,800	4,800
1	2,100	3,000
2	3,400	2,200
3	3,600	1,800
4	1,800	0

Based on the Economic Life of this project and the cost of capital is 12%, in what year should you abandoning this Project X?

A. Year 3, since NPV in year 3 = $8,429
B. Year 3, since NPV in year 3 = $2,629
C. Year 4, since NPV in year 4 = $2,892
D. Year 4, since NPV in year 4 = $2,491
E. Year 1, since NPV in year 1 = $1,24

Expert Solution

jeff jeffy answered 3 years ago

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