A Project Will Generate $1 Million Net Cash Flow Annually

question 83

Multiple Choice

A project will generate $1 million net cash flow annually in perpetuity.If the project costs $7 million,what is the lowest WACC shown below that will make the NPV negative?

• A) 10%
• B) 12%
• C) 14%
• D) 16%

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Definitions:

Right to Cure

The legal right or opportunity given to a party to rectify or correct a breach of contract or agreement before facing potential penalties or legal action.

Dog Collars

Devices worn around a dog's neck, often used for restraint, identification, fashion, or protection.

Reject Shipment

The act of refusing to accept delivery of goods because they are faulty, damaged, or not as specified in a purchase contract.

Consequential Damages

Financial losses that result indirectly from a breach of contract, beyond the immediate scope of the agreement.