Barry Company Is Considering a Project That Has the Following

question 53

Multiple Choice

Barry Company is considering a project that has the following cash flow and WACC data.What is the project's NPV? $\begin{array}{cccc} \text { WACC } &10.00 \% \\ \text { Year: } & 0 & 1 & 2 & 3 & 4 & 5 \\\hline \text {Cash flows: } &-\$ 1,200 & \$ 400 & \$ 395 & \$ 390 & \$ 385 & \$ 380\end{array}$

• A)$253.81
• B)$282.01
• C)$310.21
• D)$341.23

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Definitions:

Higher Costs

An increase in the expenses associated with production, operation, or acquisition in business or personal finances.

Worker Productivity

Worker productivity measures the output of goods and services produced per unit of labor input, often considered over a specific period of time.

Capital Required

The total amount of financial resources needed to fund a business’s operations and investments, including starting costs, assets, and working capital.

Natural Resources

Materials or substances occurring in nature which can be exploited for economic gain, including water, minerals, forests, and fossil fuels.