Question
Several companies are considering project y, which is believed by all to have a level of risk that is equal to that of the average-risk
Several companies are considering project y, which is believed by all to have a level of risk that is equal to that of the average-risk project at Lexux Corporation. Project y is required an initial investment of $86000 and then produce an expected cash flow $142000 in four years. Project y has an internal rate of return of 13.36 percent. the weighted average cost of capital for Lexus is 12.38 percent and the weighted average cost of capital for Coca cola is 14.27 percent. What will be the NPV that Coca cola company would compute for project y?
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