Question
Bottleneck Industries is considering project A. The project has expected cash flows of -$29,800.00 today, $40,400.00 in 1 year, -$50,100.00 in 2 years, and $59,400.00
Bottleneck Industries is considering project A. The project has expected cash flows of -$29,800.00 today, $40,400.00 in 1 year, -$50,100.00 in 2 years, and $59,400.00 in 3 years. The weighted-average cost of capital for Bottleneck Industries is 26.12 percent. Which one of the following assertions is true?
| The NPV of project A equals an amount that is less than or equal to $6.35. | ||
| Even though project A's expected cash flows are not conventional and even though it is possible to compute the NPV of a project with expected cash flows that are not conventional, the NPV of project A can not be computed | ||
| The NPV of project A cannot be computed, because the project's expected cash flows are not conventional and it is impossible to compute the NPV of a project with expected cash flows that are not conventional | ||
| The NPV of project A equals an amount that is equal to or greater than $6.35. | ||
| The NPV of project A equals an amount that is greater than $6.35 but less than $6.35. |
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