You are at a company meeting. Your manager has an idea to boost sales. It will require a $10,000 payment today to launch a marketing campaign. The justification for the $10,000 outlay is that sales will increase by $1,200 per year for the next 10 years. You remind your manager that the CFO requires all investments to result in a positive net present value. You also remind the manager that the cost of capital the CFO has said must be used in the NPV analysis is 12%. Your manager says he knows all of that and he is certain that the $10,000 investment meets all of the CFO's requirements. Your manager is correct.
a.True
b.False
