Lululemon Athletica Is Considering Introducing a New Line of Yoga

question 32

Multiple Choice

Lululemon Athletica is considering introducing a new line of yoga wear that is expected to increase the company's sales by $10 million in the first year,and growing by 3% every year thereafter.If the cost of introducing the new product line is $40 million today,and Lululemon's WACC is 9.4%,what is the NPV of the project?

• A)$196.25 million
• B)$66.38 million
• C)$116.25 million
• D)$468.75 million
• E)$319.15 million

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