Suppose ABC Telecom Inc.s CFO is evaluating a project with the following cash inflows. She does not know the projects

Question:

Suppose ABC Telecom Inc.’s CFO is evaluating a project with the following cash inflows. She does not know the project’s initial cost; however, she does know that the project’s regular payback period is 2.5 years.YearCash FlowYear 1$300,000Year 2$425,000Year 3$500,000Year 4$400,000If the project’s weighted average cost of capital (WACC) is 8%, what is its NPV?

Expert Answer:

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To calculate the Net Present Value NPV of the project we need to discount each cash flow back to the

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