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Several companies, including Barnyard and Energy Solutions Corporation, are considering project A, which is believed by all to have a level of risk that is
Several companies, including Barnyard and Energy Solutions Corporation, are considering project A, which is believed by all to have a level of risk that is equal to that of the average-risk project at Barnyard. Project A is a project that would require an initial investment of $74200 and then produce an expected cash flow of $96700 in 2 years. Project A has an internal rate of return of 8.65 percent. The weighted-average cost of capital for Barnyard is 11.49 percent and the weighted-average cost of capital for Energy Solutions Corporation
is 6.18 percent. What is the NPV that Energy Solutions Corporation would compute for project A?
a.3593.53
b.151995.53
c.7715.67
d.11571.11
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