Green Motors Expects a New Hybrid-Engine Project to Produce Incremental

question 56

Multiple Choice

Green Motors expects a new hybrid-engine project to produce incremental cash flows of $45million each year, and expects these to grow at 5% each year. The upfront project costs are $380 million and Green's weighted average cost of capital is 8%. If the issuance costs for external finances are $10 million, what is the net present value (NPV) of the project?

• A) $990 million
• B) $1200 million
• C) $1110 million
• D) $1125 million

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