Year 3 $3/50,000 Year 4 $3,750,000 The CFO has asked you to compute Project Gamma's initial investment using the information currently available to you. He has offered the following suggestions and observations: A project' IRR represents the return the project would operate when its NPV is zero or the discounted value of its cash inflows equals the discounted value of its cash outflows--when th $10,329,788 discounted using the project's IRR. The level of risk exhibited by Project Gamma is the same $9,987,714 jd by the company's average project, which means that Project Gamma's net cash flows can be discounted using % WACC $11,560,041 $10,081,684 Given the data and hints, Project Gamma's initial Investment is dollar), and its NEVIS (rounded to the nearest whole A projects IRR will if the project's cash inflows increase, and everything else is unaffected. Grade It Now Save Continue Bamma's initial investment using the information currently available to you. He has offered the following he project would generate when its NPV is zero or the discounted value of its cash inflows outflows-when the cash flows are discounted using t $1,078,814 R. amma is the same as that exhibited by the company's ct, which means that $863,051 discounted using Fuzzy Button's 7% WACC. $1,186,695 $1,132,755 tial investment is and its NPV is (rounded to the nearest whole broject's cash inflows increase and everythinn lenir unoff Year 4 $3,750,000 The CFO has asked you to compute Project Gamma's initial investment using the information currently availa suggestions and observations: A project's IRR represents the return the project would generate when its NPV is zero or the discounted equals the discounted value of its cash outflows-when the cash flows are discounted using the project The level of risk exhibited by Project Gamma is the same as that exhibited by the company's average po Project Gamma's net cash flows can be discounted using Fuzzy Button's 7% WACC. . decrease Given the data and stay the same mma's initial investment is dollar). increase and its NPV is A project's IRR will if the project's cash inflows increase, and everything else is unaffected Grade 11 Consider the case of Fuzzy Button Clothing Company Last Tuesday, Fuzzy Button Clothing Company lost a portion of its planning and financial data when both its main and its backup servers crashed. The company's CFO remembers that the internal rate of return (IRR) of Project Gamma is 11.3%, but he can't recall how much Fuzzy Button originally invested in the project nor the project's net present value (NPV). However, he found a note that detailed the annual net cash flows expected to be generated by Project Gamma. They are: Year Year 1 Year 2 Cash Flow $2,000,000 $3,750,000 $3,750,000 $3,750,000 Year 3 Year 4 The CFO has asked you to compute Project Gamma's initial investment using the information currently available to you. He has offered the following supoestions and observations: A project's IRR represents the return the project would generate when its NPV is zero or the discounted value of its rash infin