Question
Suppose ABC Telecom Inc.s CFO is evaluating a project with the following cash inflows. She does not know the projects initial cost; however, she does
Suppose ABC Telecom Inc.s CFO is evaluating a project with the following cash inflows. She does not know the projects initial cost; however, she does know that the projects regular payback period is 2.5 years.
| Year | Cash Flow |
|---|---|
| Year 1 | $275,000 |
| Year 2 | $475,000 |
| Year 3 | $425,000 |
| Year 4 | $400,000 |
If the projects weighted average cost of capital (WACC) is 9%, what is its NPV?
$331,254
$301,140
$286,083
$271,026
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Finance And Financial Markets
Authors: Keith Pilbeam
2nd Edition
1403948356, 978-1403948359
