Use the information for the question(s) below.
Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy,with each outcome being equally likely.The initial investment required for the project is $80,000,and the project's cost of capital is 15%.The risk-free interest rate is 5%.
-The NPV for this project is closest to:
A) $6250.
B) $14,100.
C) $10,000.
D) $18,600.
Correct Answer:
Verified
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Consider a
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A)Modigliani
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Consider a
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Consider a
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Consider a
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