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

Last month, Magnum Inc. analyzed a 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 firm's WACC). The Fed's actions did not affect the forecasted cash flows. By how much did the change in the WACC affect the project's forecasted NPV? (Ch. 11)

Old WACC 10%
New WACC 7%
Year 0 1 2 3
Cash Flow -1,000 420 420 420

Group of answer choices

$72.17

$57.73

$80.83

$46.19

$0 (no change in NPV)

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