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Question 17 10 pts Part 4 You finish the day with various meetings, phone calls, and tasks. You receive a phone call from a real
Question 17 10 pts Part 4 You finish the day with various meetings, phone calls, and tasks. You receive a phone call from a real estate broker who represents the owner of land next to your factory. The owner is willing to sell you the land so that you can expand operations of your factory. You run some quick numbers and come up with the following cash flows for a factory expansion: Year 0 -12,500,000 Year 1-4 2,250,000 Year 5 10,000,000 If the firm's cost of capital is 10% for this, is the project worth looking at further? Yes, the NPV is $250,000 which indicates that it will generate wealth for the firm's shareholders. O Yes, the NPV is +841,410 which indicates that it will add wealth to the firm's shareholders. No, expansions are not types of projects that firms evaluate. O No, the IRR is 12.02% which is an indicator that it will not maximize shareholder wealth
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