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Multi-divisional firm with weighted cost of capital

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Calco is a multi-divisional firm with a weighted cost of capital of 14 percent and a risk-adjusted discount rate for its can division of 17 percent. A planned expansion in the can division requires a net investment of $170,000 and results in expected cash inflows of $42,000 a year for seven years. Should Calco invest in this expansion? a. Yes, NPV = $10,096 b. Yes, NPV = $9,896 c. No, NPV = –$5,276 d. No, NPV = –$9,896

Reference no: EM131556125

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