Question
You are in your first year as the financial manager at Horizon Enterprises, Inc. The projects are mutually exclusive. The firm's WACC is 12%. What
You are in your first year as the financial manager at Horizon Enterprises, Inc. The projects are mutually exclusive. The firm's WACC is 12%. What is the NPV for each project? Based on the NPV method which project should the firm undertake? (Must provide NPV for both projects and choose the correct project).
| Year | Project M | Project T |
| 0 | -10,000 | -10,000 |
| 1 | 5,000 | 2,500 |
| 2 | 5,000 | 3,000 |
| 3 | 5,000 | 3,000 |
| 4 | 2,000 | 7,000 |
| 5 | 1,000 | 7,000 |
| NPV |
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Handbook For Surviving The Global Financial Crisis
Authors: Barbara Goldsmith
1st Edition
1514811995, 978-1514811993
