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Tesla is considering sponsoring a pavilion at the upcoming World's Fair. The pavilion would cost $4 million, and is expected to result in $10,000,000 of

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Tesla is considering sponsoring a pavilion at the upcoming World's Fair. The pavilion would cost $4 million, and is expected to result in $10,000,000 of cash inflow for year 1. However, at the end of the second year the pavilion would have to be demolished and the site returned to its original condition. This would cost the firm $4,500,000. Thus, the pavilion project's cash flows are as follows: Year 0 1 2 Net Cash Flow ($4 million) + 10 million (4.5 million) Which of the following statements is most correct? (Hint: Create an NPV profile. Round each NPV to the nearest dollar before you make your conclusions since some rounding already exists in the percentages used below.) a. The project should be accepted if the cost of capital is between 0 and 12.644777 percent. b. The project is not profitable for the relevant range of the cost of capital. c. The project has two IRRS (12.644777 percent and 91.143783 percent) so the project should be accepted if the firm's cost of capital is less than or equal to 12.644777 percent or greater than or equal to 91.1436783 percent. d. As the cost of capital approaches infinity, the NPV will approach negative $4 million. Which of the following statements is most correct? (Hint: Create an NPV profile. Round each NPV to the nearest dollar before you make your conclusions since some rounding already exists in the percentages used below.) O a. The project should be accepted if the cost of capital is between 0 and 12.644777 percent. O b. The project is not profitable for the relevant range of the cost of capital. O c. The project has two IRRS (12.644777 percent and 91.143783 percent) so the project should be accepted if the firm's cost of capital is less than or equal to 12.644777 percent or greater than or equal to 91,1436783 percent. Od. As the cost of capital approaches infinity, the NPV will approach negative $4 million. e. The project has two IRRs (12.644777 percent and 91.143783 percent) so the project should be accepted if the firm's cost of capital is between the two IRRs

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