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What is the up-front cost of the project

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Reference no: EM132983675

Problem 1: Todd Industries is considering Project AA whose future expected cash flows are shown below. However, the up-front cost of the project (X) is not given. You are told that the project has a WACC of 10% and that the project's NPV is zero. Based on this information, what is the up-front cost of the project, i.e., what is X?

NPV WACC = 10%

Year:            0               1            2            3                 4

CFS:            X           $560      $314    $181        $ 14

a. -$ 880.25

b. -$ 914.15

c. -$ 941.70

d. -$1,005.00

e. -$1,069.00

Reference no: EM132983675

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