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Last month, Lloyds Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the Federal

Last month, Lloyds Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firms WACC. The Feds action did not affect the forecasted cash flows. By how much did the change in the WACC affect the projects forecasted NPV? Note that a projects projected NPV can be negative, in which case it should be rejected. Old WACC: 10.00% New WACC: 9.50% Year 0 1 2 3 Cash flows -$1,000 $410 $410 $410 Select one: a. $9.04 b. $10.13 c. $11.12 d. $10.22 e. $10.85

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