A capital investment project requires a $8 million initial investment and, with a WACC of 9.8%, has

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A capital investment project requires a $8 million initial investment and, with a WACC of 9.8%, has an NPV of $67,500. Which of the following is the most sensible statement? and why? Discuss.

a. This capital investment project earns a return of about 0.675%.

b. This capital investment project has a very small profit relative to its initial investment.

c. This capital investment project earns an annual return on investment of a bit more than the cost of capital.

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Financial Analysis with Microsoft Excel

ISBN: 978-1285432274

7th edition

Authors: Timothy R. Mayes, Todd M. Shank

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Posted Date: Feb 19, 2024 06:21 AM

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A capital investment project requires a $8 million initial investment and, with a WACC of 9.8%, has

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The Net Present Value NPV of a capital investment project is a measure of the projects profitability ... View the full answer

Financial Analysis with Microsoft Excel

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