Project M Requires an Initial Investment of $25 Million

question 38

Multiple Choice

Project M requires an initial investment of $25 million.The project is expected to generate $2.25 million in after-tax cash flow each year forever.If the weighted average cost of capital (WACC) is 9%,calculate the NPV of the project.

• A)-2.5 million
• B)+2.5 million
• C)zero
• D)+2.1 million

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