Question
Suppose Praxis Corporations CFO is evaluating a project with the following cash inflows. She does not know the projects initial cost; however, she does know
Suppose Praxis Corporations 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 | $350,000 |
| Year 2 | 500,000 |
| Year 3 | 450,000 |
| Year 4 | 425,000 |
If the projects weighted average cost of capital (WACC) is 10%, what is its NPV?
$256,299
$284,777
$227,822
$299,016
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
