Business, 08.07.2021 21:10 karinapenn8259

Suppose Green Caterpillar Garden Supplies Inc. is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows: Year Cash Flow
Year 1 $300,000
Year 2 $475,000
Year 3 $475,000
Year 4 $400,000
Green Caterpillar Garden Supplies Inc's weighted average cost of capital is 9%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV?
a. -$4,156,661
b. -$1,406,661
c. -$931,661
d. -$1,617,660

Answers: 3

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Suppose Green Caterpillar Garden Supplies Inc. is evaluating a proposed capital budgeting project (p...