Should the board approve the 7e7 project

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Reference no: EM133326685

Question: Assume the WAC of the 7E7 project is 9.39%. Should the board approve the 7E7 project? Why or why not? Please provide explicit examples.

The WACC is basically the discount rate that is required so that the NPV is non-negative (either break-even or a profit)when both debt and equity are used.

Look at " Exhibit 8 FCF Forecast". Specifically the free cash flows at the end of each year because they contribute to the NPV and that is the most important metric of a project's success.

Look at "Exhibit 9 and Model Drivers" , where different IRRs impact the Boeing 7E7 project.

Reference no: EM133326685

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