How Much Could NPV Be Affected by a Worst-Case Scenario

question 54

Multiple Choice

How much could NPV be affected by a worst-case scenario of 25 percent reduction from the $3 million in expected annual cash flows on a five-year project with 10 percent cost of capital? (use the values in dollar)

• A)$2,843,090
• B)$3,750,000
• C)$4,578,825
• D)$6,155,274

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