Select all that apply.
1 answer:
You might be interested in
Answer:
C. $9.04
Step-by-step explanation:
The net present value of a cash flow C in year n at some interest rate r is given by ...
NPV = C·(1 +r)^(-n)
Adding the values of the different cash flows at the different interest rates, we get the results shown in the attached table. The NPV goes up by $9.04 when the cost of capital goes down.
_____
<em>Additional comment</em>
Neither WACC will cause this project to be rejected. If the WACC were to increase to 11.11%, then the project would have a zero return.
