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NEW QUESTION: 1
Braun Industries is considering an investment project, which has the following cash flows:
tProject Cash Flows
0-$1,000
1 400
2 300
3 500
4 400
The company's WACC is 10 percent. What is the project's payback, internal rate of return and net present value?
A. Payback = 2.4, IRR = 10.00%, NPV = $600.
B. Payback = 2.6, IRR = 24.12%, NPV = $300.
C. Payback = 2.6, IRR = 21.22%, NPV = $260.
D. Payback = 2.6, IRR = 21.22%, NPV = $300.
E. Payback = 2.4, IRR = 21.22%, NPV = $260.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Payback = 2 + 300/500 = 2.6 years.
IRR: -1000 + 400/(1+Irr)