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Bottle Rocket Engineering has a weighted average cost of capital of 12.42 percent. The firm is evaluating project A, which is believed by all to

Bottle Rocket Engineering has a weighted average cost of capital of 12.42 percent. The firm is evaluating project A, which is believed by all to have a cost of capital of 12.42 percent. The project would move an initial investment of $18,500.00, an expected cash flow of -$11,800.00 in year 1, and an expected cash flow of $48,700.00 in year 2. Stride Fast Mechanical has a lower weighted average cost of capital than Bottle Rocket Engineering. Which of the following assertions is true?
Since the expected cash flows for project A are not conventional, the NPV can not be computed

The NPV of project A computed by Bottle Rocket Engineering would be less than the NPV of project A computed by Stride Fast Mechanical

O It is not clear whether the NPV of the project computed by Bottle Rocket Engineering would be less than, equal to, or greater than the NPV of the project computed by Stride Fast Mechanical

O The NPV of project A computed by Bottle Rocket Engineering would be greater than the NPV of project A computed by Stride Fast Mechanical

O The NPV of project A computed by Bottle Rocket Engineering would be equal to the NPV of project A computed by Stride Fast Mechanical

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