Project M Requires an Initial Investment of $25 Million

question 83

Multiple Choice

Project M requires an initial investment of $25 million. The project is expected to generate $2.25 million in after-tax cash flow each year forever. If the weighted average cost of capital (WACC) is 9 percent, calculate the NPV of the project.

• A)−2.5 million
• B)+2.5 million
• C)Zero
• D)+2.1 million

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