Question
9. Boomer Enterprises is analyzing a potential project known as Project Zap! which has a 3 year life. Project Zap! has the following expected FCFs
9. Boomer Enterprises is analyzing a potential project known as Project Zap! which has a 3 year life. Project Zap! has the following expected FCFs : $-40,000 at t = 0, $5,132 at t = 1, $29,963 at t = 2, and $60,826 at t = 3. Boomer has a tax rate of 28%. The entire project was initially funded via selling zero coupon bonds to investors. The YTM on the bonds was 5.34%. The bonds mature in three years. Boomer's WACC is estimated to be 8.8%. You've been asked to determine if the project should be pursued. Compute the appropriate NPV for decision making purposes, and report it below. Provide an answer with at least 4 digits of precision.
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