Last Month, Lloyd's Systems Analyzed the Project Whose Cash Flows

question 24

Multiple Choice

Last month, Lloyd's Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project took place, the Federal Reserve 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 expected NPV can be negative, in which case it should be rejected.

• A) -$18.89
• B) -$19.88
• C) -$20.93
• D) -$22.03
• E) -$23.13

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Programs that allow employees to select the mix of benefits and services that will answer their individual needs. Also known as cafeteria benefit programs.

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Benefits offered by employers that allow their employees to purchase the company's products or services at a reduced price.

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