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A company is considering a new project they consider to be a riskier than their current operations. Thus, management has decided to add 5 percent
A company is considering a new project they consider to be a riskier than their current operations. Thus, management has decided to add percent to their company's overall cost of capital, WACC, when evaluating this project. The project requires an investment of $ right away and projected cash inflows of $ at the end of the first year. The company's overall WACC is percent. What is the projected net present value of the new project to the nearest dollar? Hint: You need to find the project's WACC and discount the cash flow by the project WACC.
a $
b $
c $
d$
e $
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