Reed Enterprises Is Considering a Project That Has the Following

question 4

Multiple Choice

Reed Enterprises is considering a project that has the following cash flow and WACC data.What is the project's NPV? Note that a project's expected NPV can be negative,in which case it will be rejected. $\begin{array}{lcccc}\text { WACC: } & 10.00 \% \\\text { Year } & 0 & 1 & 2 & 3 \\\text { Cash flows } & -\$ 1.050 & \$ 450 & \$ 460 & \$ 470\end{array}$

• A) $92.37
• B) $96.99
• C) $101.84
• D) $106.93
• E) $112.28

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Definitions:

Wage Decrease

The reduction in the rate of pay received by employees for their labor.

Leisure

The time spent away from work and compulsory activities to rest, relax, or engage in freely chosen activities and hobbies.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate, reflecting their participation in the labor force.

Consumer Preferences

These are the subjective likes, dislikes, desires, and needs that motivate buying decisions and are influenced by various sociocultural and economic factors.