Question
the federal reserve recently shifted its monetary policy, causing Lasik Visions WACC to change. Lasik had recently analyzed the project whose cash flows are shown
the federal reserve recently shifted its monetary policy, causing Lasik Visions WACC to change. Lasik had recently analyzed the project whose cash flows are shown below. However the CFO wants to reconsider this and all other propositions. How much did the changer WACC cause the forecasted NPV to change?
assume that the Fed action does not affect the the cash flows and note that a projects projected NPV can be negative in which case it should be rejected. Hint: you need to find the NPVs under WACC=7% and 10%.
New Wacc = 7% Old Wacc = 10% Year. 0. 1. 2. 3 cash flows. (1000) 500. 520. 540
please show the formulas used in excel
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