1 12 15 3 4 A firm's WACC (weighted average cost of capital) is 12.5% 5 A proposed project has the following cash flows: 6 7 Year Cash Flow 8 0 -29 9 -13 10 2 -6 3 12 4 11 13 5 14 14 6 17 7 7 16 8 ? 17 18 You're wondering how "close to the edge" this project is. 19 What cash flow in the 8th year would cause the project's 20 NPV to be zero? (Hint: it could be either positive or negative.) 21 22 A Positive ending cash flow between 1 and 13 23 B Positive ending cash flow between 13 and 40 24 C Negative ending cash flow between - 1 and -13 25 D Negative ending cash flow between -13 and -40 26 27 28 29 120