Question: OmegaTech is considering project A. The project would require an initial investment of $56,300.00, and then have an expected cash flow of $75,800.00 in 4
OmegaTech is considering project A. The project would require an initial investment of $56,300.00, and then have an expected cash flow of $75,800.00 in 4 years. Project A has an internal rate of return of 9.31 percent. The weighted-average cost of capital for OmegaTech is 6.78 percent. Which one of the following assertions is true?
| The NPV that OmegaTech would compute for project A can not be computed from the information provided | ||
| None of the other alternatives are correct | ||
| The NPV that OmegaTech would compute for project A is less than or equal to -$10.97. | ||
| The NPV that OmegaTech would compute for project A is equal to greater than $10.97. | ||
| The NPV that OmegaTech would compute for project A is greater than -$10.97 but less than $10.97. |
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