Multiple Choice
How much could NPV be affected by a worst-case scenario of 25 percent reduction from the $3 million in expected annual cash flows on a five-year project with 10 percent cost of capital?
A) $2,843,090
B) $3,750,000
C) $4,578,825
D) $6,155,274 $3 million x 25% = $750,000 annual reduction in cash flow
Change in NPV = $750,000
Correct Answer:
Verified
Correct Answer:
Verified
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