Stonehedge dairy will expand its organic yogurt production, Ask an Expert

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Stonehedge Dairy will expand its organic yogurt production capacity at a cost of $10,000,000. The expansion will increase after-tax operating cash by $1.4 million dollars per year for the next 20 years. Stonehedge's WACC is 10%. To raise the $10,000,000 Stonehedge will need to issue new securities at a weighted average flotation cost of 10%. What is the NPV of the expansion?

A) $918,989
B) $807,878
C) $11,918,989
D) $1,918,989

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9871372

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