Ellmann Systems Is Considering a Project That Has the Following

question 57

Multiple Choice

Ellmann Systems is considering a project that has the following cash flow and WACC data.What is the project's NPV? Note that if a project's expected NPV is negative,it should be rejected. $\begin{array}{lcccc}\text { WACC: } & 9.00 \% \\\text { Year } & 0 & 1 & 2 & 3 \\ \text { Cash flows } & -\$ 1.000 & \$ 500 & \$ 500 & \$ 500\end{array}$

• A) $265.65
• B) $278.93
• C) $292.88
• D) $307.52
• E) $322.90

---

Definitions:

Cartel Policies

Strategies and rules established by a cartel, an association of independent businesses formed to control production, pricing, and marketing of goods, to maximize collective profits.

American Automobile Producers

Companies based in the United States that manufacture cars, trucks, and other vehicles.

Successful Collusion

An agreement between competing entities to control prices or market shares for mutual benefit, often regarded as illegal or unethical.

Imposition of Tariffs

The act of a government applying taxes on imported goods to protect domestic industries and adjust trade balances.