Edmondson Electric Systems is considering a project that has the following cash

Question

Edmondson Electric Systems is considering a project that has the following cash flow and WACC data.What is the project's NPV?Note that if a project's projected NPV is negative, it should be rejected. WACC:10.00% Year: 0 1 2 3 Cash flows: -$1000$500 $500$500 Answer A. $243.43 B. $255.60 C. $268.38 D. $295.89 E. $281.80 Edmondson Electric Systems is considering a project that has the following cash flow and WACC data.What is the project's NPV?Note that if a project's projected NPV is negative, it should be rejected. WACC:10.00% Year: 0 1 2 3 Cash flows: -$1000$500 $500$500 Edmondson Electric Systems is considering a project that has the following cash flow and WACC data.What is the project's NPV?Note that if a project's projected NPV is negative, it should be rejected. WACC:10.00% Year: 0 1 2 3 Cash flows: -$1000$500 $500$500 $243.43 $243.43 $255.60 $255.60 $268.38 $268.38 $295.89 $295.89 $281.80 $281.80 A. $243.43 B. $255.60 C. $268.38 D. $295.89 E. $281.80

Explanation / Answer

Hi,

NPV can be calculated as follows:

= -1000 + 500/(1+.10)^1 + 500/(1+.10)^2 + 500/(1+.10)^3 = 243.426 or 243.43.

Option A is correct.

Thanks.

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