Swim Locker Inc. sells swimming apparel and accessories; its WACC is 9.5 percent.  Time Machine Inc. sells watches and has a WACC of 12.3 percent.  Swim Locker is considering adding waterproof watches to their product line. The initial cash outlay for the watch project is $154,000. The expected net cash inflows (incremental to the watch project) are $67,000 a year for 6 years. What is the net present value of this opportunity for Swim Locker?

Answer rating: 100% (QA)

The net present value NPV can be calculated using the formula NP... View the full answer