Coca-Cola Amatil (CCL) Has a Weighted Average Cost of Capital

question 54

Multiple Choice

Coca-Cola Amatil (CCL) has a weighted average cost of capital of 9%. CCL is considering investing in a new plant that will save the company $25 million over each of the first two years, and then $10 million each year thereafter. If the investment is $100 million, what is the net present value (NPV) of the project?

• A) $37.5 million
• B) $34.2 million
• C) $39.7 million
• D) $36.5 million

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Definitions:

Managerial Problem Solving

The process by which managers identify, assess, and resolve issues impacting their organization's operations or objectives effectively.

Behavioural Approach

A management perspective focusing on the actions and behaviors of individuals in organizations, aiming to improve productivity and satisfaction.

Human Resource Approach

A management strategy focusing on the development, well-being, and optimization of an organization's workforce.

Satisfying Social Relationships

Interactions and connections with others that fulfill emotional, psychological, and social needs, leading to a sense of contentment and well-being.