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.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!