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Project cash flows are provided below. The project is assumed to have an infinitely long life with post year 4 cash flows growing at 3%
Project cash flows are provided below. The project is assumed to have an infinitely long life with post year 4 cash flows growing at 3% in perpetuity. WACC is 10%. Compute NPV. (Hint: 'present value' of terminal value at t=4 is FCFF4*(1+g)/(WACC-g))
0 | 1 | 2 | 3 | 4 | |
FCFF | -100 | 75 | 85 | 95 | 105 |
A) 1237
B) 1545
C) 182
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