Tencent is considering a new add-on for its social media platform. The project has an initial investment cost of $28 million and will return $11.75 million a year in real terms over the next 3 years (assume cash flows occur at the end of the year). Because of changing economic conditions, you expect inflation to be 7% for all years after the first payment in T1. The project WACC applicable for all periods is 11%. Calculate the NPV of the project. Show all work in your Excel worksheet.

- $27.00

$2.63

$6.88

$4.61

None of the options listed.

Answer rating: 100% (QA)

A B D E B C E F 1 1 Answer 2 Answer 3 3 4 NPV of the project is 263 4 NPV of t... View the full answer