Question: 1 . WACC is 1 5 % . D / E = 2 . 0 . This investment requires $ 2 million up front. CFs

1 .

WACC is

15 % .

/

= 2.0 .

This investment requires $

2

million up front. CFs are expected to be indefinite and will occur at the end of every year going forward starting at the end of the first year. The growth rate is constant at

5 %

annually, and next year

s cash flow

(

1)

is projected to be $

250, 000 .

What is the NPV of this project?

* * *

Round to whole number

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