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Use the Following Information to Answer the Question(s)below

Question 31

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Use the following information to answer the question(s) below.
Rearden Metal is evaluating a project that requires an investment of $150 million today and provides a single cash flow of $180 million for sure one year from now.Rearden decides to use 100% debt financing for this investment.The risk-free rate is 5% and Rearden's corporate tax rate is 21%.Assume that the investment is fully depreciated at the end of the year.
-The NPV of this project using the WACC method is closest to:


A) $10 million.
B) $17 million.
C) $42 million.
D) $71 million.

Correct Answer:

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