Question
Suppose Extensive Enterprisess CFO is evaluating a project with the following cash inflows. She does not know the projects initial cost; however, she does know
Suppose Extensive Enterprisess 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 | $325,000 |
| Year 2 | $475,000 |
| Year 3 | $425,000 |
| Year 4 | $500,000 |
If the projects weighted average cost of capital (WACC) is 10%, what is its NPV?
$319,515
$403,598
$336,332
$269,066
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Building Financial Models
Authors: John Tjia
2nd Edition
0071608893, 978-0071608893
