Lasik Vision Inc A) -$3055
B) -$34

question 96

Multiple Choice

Lasik Vision Inc.recently analyzed the project whose cash flows are shown below.However,before Lasik decided to accept or reject the project,the Federal Reserve took actions that changed interest rates and therefore the firm's WACC.The Fed's action did not affect the forecasted cash flows.By how much did the change in the WACC affect the project's forecasted NPV? Note that a project's projected NPV can be negative,in which case it should be rejected. $$\begin{array} { l c c c c } \text { Old WACC: } & 8.00 \% & { \text { New WACC: } 9.75 \% } \\\text { Year } & 0 & 1 & 2 & 3 \\\hline \text { Cash flows } & - \$ 1,000 & \$ 410 & \$ 410 & \$ 410\end{array}$$

• A) -$30.55
• B) -$34.12
• C) -$32.50
• D) -$28.60
• E) -$29.25

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Definitions:

Capitalist Aims

Capitalist aims involve maximizing profit and capital accumulation within a market economy, typically emphasizing private ownership, competition, and limited government intervention in economic activities.

Self-Fulfilling Prophesy

A forecast that, through a cycle of self-reinforcement, becomes a reality because of the interaction between conviction and action.

Classic And Contemporary Research

Involves the study and application of key findings and methodologies from both historical and modern academic inquiries across disciplines.

Intersections Of Race

The concept that explores how racial identity intersects with other social categories such as gender, class, and sexuality, affecting individuals' experiences and opportunities.