Question: Bottleneck Industries is considering project A. The project has expected cash flows of -$29,100.00 today, $41,000.00 in 1 year, $50,800.00 in 2 years, and $60,600.00

Bottleneck Industries is considering project A. The project has expected cash flows of -$29,100.00 today, $41,000.00 in 1 year, $50,800.00 in 2 years, and $60,600.00 In 3 years. The weighted-average cost of capital for Bottleneck Industries is 26.55 percent. Which one of the following assertions is true?

  • The NPV of project A cannot be computed, because the project's expected cash flows are no conventional and it is impossiblo to compute the NPV of a project with oxpected cash flows thal aro nol conventional
  • The NPV of project A equals an amount that is equal lo or greater than $5.94.
  • The NPV of project A equals an amount that is less than or equal to $5.94.

O Even though project A's expected cash lows are not conventional and even though it is possible to compute the NPV of a project with expected cash llows that are not conventional, the NPV of project A can nol be

computed

The NPV of project A equals an amount that is greater than $5.94 but less than $5.94

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