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

question 31

Multiple Choice

Green Motors expects a new hybrid-engine project to produce incremental cash flows of $100 million each year and expects these to grow at 4% each year. The upfront project costs are $900 million and Green's weighted average cost of capital is 9%. If the issuance costs for external finances are $10 million, what is the net present value (NPV) of the project?

• A)$1 090 million
• B)$1 800 million
• C)$1 290 million
• D)$1 100 million

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Definitions:

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Order Cycle Time

The total time from when a customer places an order until the product is delivered, used as a key performance indicator in supply chain management.

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