Question
Projects A and B both have an initial cost of $10,000, followed by a series of positive cash inflows. Project As undiscounted net cash flows
Projects A and B both have an initial cost of $10,000, followed by a series of positive cash inflows. Project As undiscounted net cash flows total $20,000, while Bs total undiscounted flows are $30,000. At a WACC of 10%, the two projects have identical NPVs. Which projects NPV is more sensitive to changes in the WACC and briefly discuss why?
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Money Banking And Financial Markets
Authors: Stephen G. Cecchetti
1st Edition
0072452692, 9780072452693
