An investment has an outlay of 100 and after-tax cash flows of 40 annually for four years.

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An investment has an outlay of 100 and after-tax cash flows of 40 annually for four years. A project enhancement increases the outlay by 15 and the annual after-tax cash flows by 5. As a result, the vertical intercept of the NPV profile of the enhanced project shifts:

A. up and the horizontal intercept shifts left.

B. up and the horizontal intercept shifts right.

C. down and the horizontal intercept shifts left.

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Corporate Finance A Practical Approach

ISBN: 9781118217290

2nd Edition

Authors: Michelle R Clayman, Martin S Fridson, George H Troughton, Matthew Scanlan

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