Should calco invest in the expansion

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Question 1: Calco is a multi-divisional firm with a weighted cost of capital of 14 percent and a risk-adjusted discount rate for its can division of 17%. A planned expansion in the can division requires a net investment of $170,000 and results in expected cash inflows of $42,000 a year for seven years. Should Calco invest in this expansion?

Yes, NPV = $9,896No, NPV = -$5,276No, NPV = -$9,896Yes, NPV = $10,096

Reference no: EM132513428

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