A project's expectation of its future cash flows is summarized in the following table:

2015 +3.5 M$

2016 +4.0 M$

2017 -0.5 M$

2018 +5.1 M$

a. Knowing that these cash-flows take place at the end of each corresponding period, what

is the present value of these cash-flows if the WACC used as a discount rate is 10%?

b. Three consultants in project management are submitting proposals to deliver the project.

They know that proposals with present values lower than 10 MS will not be considered.

What is your expectation of the WACC they will be using in order to make sure that their

bids will be considered?