Question: Klause' Industries is considering Project S whose future expected cash flows are shown below. However, the up-front cost of the project (X) is not given.

Klause' Industries is considering Project S whose future expected cash flows are shown below. However, the up-front cost of the project (X) is not given. You are told that the project has a WACC of 7% and that the projects NPV is zero. Based on this information, what is the up-front cost of the project, i.e., what is X?

WACC = 7%

Year: 0 1 2 3 4

CF_S: X $425 $710 $290 $ 35

a. -$1,000.00

b. -$1,236.23

c. -$1,280.77

d. -$1,304.05

e. -$1,460.00

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