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What is the NPV of the project if WACC is the discount rate? What is the profitability index of the project if WACC is the

image text in transcribedWhat is the NPV of the project if WACC is the discount rate? What is the profitability index of the project if WACC is the discount rate?

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MGM, Inc. is evaluating the following project. Estimated cash flows are as follows, MGM estimates a weighted average cost of capital (WACC) of 11.3%, an after-tax cost of debt of 7.5%, and a cost of equity of 14.1%. Assume MGM, Inc. finances only through debt and equity. YEAR 0 2 ANNUAL CASH FLOWS from PROJECT -100,000 20,000 20,000 20,000 40,000 40,000 40,000 3 4 5 6

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