Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years. Year Cash Flow Year 1 $375,000 Year 2 $500,000 Year 3 $450,000 Year 4 $500,000 If the project’s weighted average cost of capital (WACC) is 9%, what is its NPV? $348,243 $439,886 $384,901 $366,572
Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years. Year Cash Flow Year 1 $375,000 Year 2 $500,000 Year 3 $450,000 Year 4 $500,000 If the project’s weighted average cost of capital (WACC) is 9%, what is its NPV? $348,243 $439,886 $384,901 $366,572
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years.
|
Year
|
Cash Flow
|
|---|---|
| Year 1 | $375,000 |
| Year 2 | $500,000 |
| Year 3 | $450,000 |
| Year 4 | $500,000 |
If the project’s weighted average cost of capital (WACC) is 9%, what is its NPV ?
$348,243
$439,886
$384,901
$366,572
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