Question
A number of companies, including Litchfield Design and Oxygen Optimization, are considering undertaking project A, which is believed by all to have a level of
A number of companies, including Litchfield Design and Oxygen Optimization, are considering undertaking project A, which is believed by all to have a level of risk that is equal to that of the average-risk project at Litchfield Design.Project A is a project that would require an initial investment of 6,249 dollars and then produce an expected cash flow of 11,538 dollars in 6 years.Project A has an internal rate of return of 10.761 percent.The weighted-average cost of capital for Litchfield Design is 9.86 percent and the weighted-average cost of capital for Oxygen Optimization is 11.24 percent.What is the NPV that Oxygen Optimization would compute for project A?
can anyone solve this questions in 15 min? I really need a help. Thanks!
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