1 answer

Question 4 What is the NPV of the following project? The project is considered higher-than- Not...

Question:

Question 4 What is the NPV of the following project? The project is considered higher-than- Not yet average risk. answered Ye
Question 4 What is the NPV of the following project? The project is considered higher-than- Not yet average risk. answered Year Project A Marked out of -1,000 2.00 P Flag 1 700 question 2 500 3 300 WACC brackets: Higher-then-average risk: 9 % Average risk: 6% Lower-than-average risk: 3% Select one: a. $425.45 b. $490.22 C. $294.69 d. $455.09 e. $357.26

Answers

Given,

Initial investment = $ 1000

Since project A is considered higher than average risk, we take WACC bracket of 9%

So, WACC = 9%

Solution :-

BI Cash PU factor Inflows @ 9% D: Вхс Present Value of cash inflows 200 0.91743119 642.20 Soo 420.84 0.84168 0.77218348 300 2

.

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