Question: Last month, Standard Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project took place,

 Last month, Standard Systems analyzed the project whose cash flows are

Last month, Standard Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project took place, the Federal Reserve changed interest rates and therefore the firm's cost of capital (1) changed. The Fed's action did not affect the forecasted cash flows. By approximately how much did the change in the r affect the project's forecasted NPV li.e, what was the change in NPV)? Old 8.00% New r: 9.5% Year 0 1 2 3 Cash flows -$1,000 $520 $520 $520 -$37.22 -$29.54 -$42.78 -$25.34 -$35.46

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