Barry Company is considering a project that has the following cash flow and WACC

Question

Barry Company is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: 8.50% Year 0 1 2 3 4 5 Cash flows -$1,100 $400 $390 $380 $370 $360






Answer a. $319.05 b. $403.86 c. $496.74 d. $407.89 e. $488.66

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Barry Company is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: 8.50% Year 0 1 2 3 4 5 Cash flows -$1,100 $400 $390 $380 $370 $360






WACC: 8.50% Year 0 1 2 3 4 5 Cash flows -$1,100 $400 $390 $380 $370 $360 $319.05 $403.86 $496.74 $407.89 $488.66

Include formula
WACC: 8.50% Year 0 1 2 3 4 5 Cash flows -$1,100 $400 $390 $380 $370 $360

Explanation / Answer

Solution

Ans is B. $403.86

NPV = -$1,100 + $400/1.085 + $390/1.085^2 + $380/1.085^3 + $370/1.085^4 + $360/1.085^5

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