Intro

A project requires an initial investment of $60 million and will then generate the same cash flow every year for 8 years. The project has an internal rate of return of 15% and a cost of capital of 10%.

Attempt 1/2 for 10 pts.

Part 1

Without computation, what's your best guess of the project's NPV?

cannot tell anything about the NPV

could be negative

positive or negative depending on the annual cashflow amount

must be positive

Correct

Attempt 1/3 for 10 pts.

Part 2

Compute the project's NPV (in $ million)?