Question: Suppose Extensive Enterprises's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost, however, she does know
Suppose Extensive Enterprises's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost, however, she does know that the project's regular payback period is 2.5 years. If the project's weighted average cost of capital (WACC) is8%, what is its NPV? Year Cash F Year 1 $275,000 Year 2 $425,000 Year 3 $475,000 Year 4 $500,000 O $404,780 O $426,084 O $489,997 O $383,476 Which of the following statements indicate a disadvantage of using the discounted paybock period for capital budgeting decisions? Check all that apply. The discounted pesback period does not take the project's entire life into account. D The discounted payback period is calculated using net Income instead of cash fows The discounted payback period does not take the time value of money into account Suppose Extensive Enterprises's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost, however, she does know that the project's regular payback period is 2.5 years. If the project's weighted average cost of capital (WACC) is8%, what is its NPV? Year Cash F Year 1 $275,000 Year 2 $425,000 Year 3 $475,000 Year 4 $500,000 O $404,780 O $426,084 O $489,997 O $383,476 Which of the following statements indicate a disadvantage of using the discounted paybock period for capital budgeting decisions? Check all that apply. The discounted pesback period does not take the project's entire life into account. D The discounted payback period is calculated using net Income instead of cash fows The discounted payback period does not take the time value of money into account
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