Question
Platinum Water Industrial is considering project A. The project has expected cash flows of -4,864 dollars today, 1,753 dollars in 1 year, -6,527 dollars in
Platinum Water Industrial is considering project A. The project has expected cash flows of -4,864 dollars today, 1,753 dollars in 1 year, -6,527 dollars in 2 years, and 11,371 dollars in 3 years. The weighted-average cost of capital for Platinum Water Industrial is 9.2 percent. Which one of the following assertions is true?
| A. The NPV of project A equals an amount that is less than or equal to $5.00 | ||
| B. The NPV of project A cannot be computed, because the projects 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 | ||
| C. The NPV of project A equals an amount that is greater than $5.00 but less than $5.00 | ||
| D. Even though project As 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 equals an amount that is equal to or greater than $5.00 |
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
6th Edition
0201538997, 978-0201538991
