Question: Berkeley Studios which currently sells art products, is considering project Q which would involve teaching art lessons. For most of its existence, Berkeley Studios sold
Berkeley Studios which currently sells art products, is considering project Q which would involve teaching art lessons. For most of its existence, Berkeley Studios sold art products, taught art lessons and painted mural Project would require an initial investment of $67,200 today and is expected to produce annual cash flows of $10.200 bach year forever with the first annual cash flow expected in 1 year. What is the NPV of project based on the information in this paragraph and the following table and applying the pure play approach to determining a project's cost of capital? Firm Berkeley Studios Frisco Foco Norcia Art actory Line of business Sells art products Paints mural tres dort and commercials Teaches atlon Salls art products, teaches artonpinta mural WACC 7 percent percent 19.5 percent a 537.090 plus or minus 510) Ob $144,518 colus or minus 510) 545.163 iphs or minus 510) Od 520,00 plus or minus 5101 e. None of the above is within 510 of the correct
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