Problemford motors expects a new hybrid-engine project to, Ask an Expert

Finance

Problem:

Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $100 million each year and expects these to grow at 4% each year. The upfron project costs are $900 million and ford's weighted average cost of capital is 9%.

Required:

If the issuance costs for external fincances are $10 million what is the net present value (NPV) of the project?

A) 1800 million

b) 1290 million

c) 1100 million

d) 1090 million

Note: Be sure to show how you arrived at your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162539

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