Part 2

Assume the new projects operating cash flows for the upcoming 5 years are as follows:

	Project A
Initial Outlay	$ -8,000,000.00
Inflow year 1	1,020,000.00
Inflow year 2	1,850,000.00
Inflow year 3	1,960,000.00
Inflow year 4	2,370,000.00
Inflow year 5	2,550,000.00
WACC	?

2-a. What are the WACC (restated from Part 1), NPV, IRR, and payback years of this project? (Negative values should be entered with a minus sign. All answers should be entered rounded to 2 decimal places. Your answers for WACC and IRR should be whole percentages (e.g. .3555 should be entered as 35.55).

2-b. Shall the company accept or reject this project based on the outcome using the net present value (NPV) method?

multiple choice 2

• Project A should be accepted

• Project A should be rejected

20 points WACC (from Part 1) NPV IRR Payback Method 20 points WACC (from Part 1) NPV IRR Payback Method