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NPV - exercise #1 A project's initial cost is $100,000. It is expected to produce cashflows of $30,000 for 5 years. a ) If the

NPV - exercise #1

A project's initial cost is $100,000. It is expected to produce cashflows of $30,000 for 5 years. a) If the WACC is 9%, what is the NPV? b) Based on the answer to a above, should the project be accepted or rejected? Why? c) Based on the answer to b above, will the project increase the value of the firm, decrease it, or have no impact on the value of the firm?

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