Warnock Inc $\quad 10.00 \%$ A $\$ 54.62$ B $\$ 57.49$ C $\$ 60.52$

question 48

Short Answer

Warnock Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: $\quad 10.00 \%$
$\begin{array}{c}\begin{array}{lll} \text {Year}\\\text {Cash flows}\end{array}\begin{array}{lll} 0 \\\hline -\$950 \end{array}\begin{array}{lll}1 \\\hline \$500\end{array}\begin{array}{lll}2 \\\hline \$400\end{array}\begin{array}{lll}3 \\\hline \$300\end{array}\end{array}$

a $\$ 54.62$
b. $\$ 57.49$
c. $\$ 60.52$
d. $\$ 63.54$
e. $\$ 66.72$

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Definitions:

Correlation Coefficients

Statistical measures that indicate the extent to which two variables fluctuate together, showing the strength and direction of their relationship.

Statistics

The science of collecting, analyzing, interpreting, presenting, and organizing data.

Numbers

Quantitative data or values used to measure, evaluate, or compare aspects of a business or its operations.

Predictive Validation

Research that uses the test scores of all applicants and looks for a relationship between the scores and the future performance of the applicants who were hired.