Question: ABC Company analyzed the project whose cash flows are shown below. However, before the compay decides to accept or reject the project, the central bank

ABC Company analyzed the project whose cash flows are shown below. However, before the compay decides to accept or reject the project, the central bank changed policy interest rates and therefore the firm's required rate of return (WACC). The central bank's action did not change the forecasted cash flows. By how much did the change in the required return (WACC) affect the project's forecasted NPV?

Old Required Rate:	10.00%		New Required Rate:	12.50%
Year	0	1	2	3
Cash flows	-$1,000	$410	$410	$410

	1.	-$43.26
	2.	-$44.12
	3.	-$47.15
	4.	-$48.02
	5.	-$39.80

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