Ellmann Systems Is Considering a Project That Has the Following $\begin{array}{lccc}r& 9.00\%\\\text { Year: } &0& 1 & 2 & 3 \\ \text { FCF: } & -\$ 1000 & \$ 500 & \$ 500& \$ 500\end{array}$

question 93

Multiple Choice

Ellmann Systems is considering a project that has the following cash flow and cost of capital (r) data. What is the project's NPV? Note that if a project's expected NPV is negative, it should be rejected. $\begin{array}{lccc}r& 9.00\%\\\text { Year: } &0& 1 & 2 & 3 \\ \text { FCF: } & -\$ 1000 & \$ 500 & \$ 500& \$ 500\end{array}$

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

---

Definitions:

Merger Transaction

A corporate action where two or more companies are consolidated into one entity, often to enhance competitiveness or grow market share.

Accounts Payable

Liabilities owed by a company to creditors or suppliers for goods and services received but not yet paid for.

Operating Activities

Activities directly related to the day-to-day operations of a business, including the production, sales, and delivery of the company's product and services.

Indirect Method

A way of calculating cash flows in the cash flow statement, where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.