Patterson Co.is considering a project that has the following cash flow and WACC data.What is the project's NPV? Note that a project's expected NPV can be negative,in which case it will be rejected.
A)$54.62
B)$57.49
C)$60.52
D)$63.54
E)$66.72

Question

Patterson Co.is considering a project that has the following cash flow and WACC data.What is the project's NPV? Note that a project's expected NPV can be negative,in which case it will be rejected. 
A)$54.62 
B)$57.49 
C)$60.52 
D)$63.54 
E)$66.72

Quizplus · Accepted Answer

The NPV calculation involves discounting the cash flows at the given WACC of 10.5%. Using a financial calculator or spreadsheet, we find that the NPV is $60.52. As the NPV is positive, the project would be accepted.