Question: . Questions 14 - 20 are all based on the following information. Mr. Woodridge, the CEO of Woodstock Wood Chippers, Inc. believes that the firm

. Questions 14 - 20 are all based on the following information. Mr. Woodridge, the CEO of Woodstock Wood Chippers, Inc. believes that the firm could create additional value by adding stump grinders to its product mix. Machinery used in producing the stump grinders would cost $16,500,000. According to Woodridge's projections, the subsequent net cash flows the company would generate for the investors if it entered the stump grinder business would be $2,280,000 per year for 12 years. These are the only cash flows expected. The firm's annual weighted average cost of capital for a project of this type is 8.6%. QUESTION: What would the stump grinder project's NET PRESENT VALUE (NPV) be if the annual WEIGHTED AVERAGE COST OF CAPITAL WERE ZERO PERCENT (0%) instead of 8.6%? O A. $16,660,669.33 B. $1,185,000.00 C. $0 D. - $16,500,000.00 E. $10,860,000.00
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