A Firm Forecasts a Project's Net Cash Flows ($Millions)in Years

question 23

Multiple Choice

A firm forecasts a project's net cash flows ($millions) in years 1 thru 4 as $120,$130,$135,and $137,respectively.If the project ends at the end of the fourth year,what is the horizon value of the project? Assume that the company had a historical growth rate of 3% and has a discount rate of 10%.

• A)$0.00
• B)$1.37
• C)$1.96
• D)$4.87

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Definitions:

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