amh926292
amh926292
27.06.2019 • 
Business

As a separate project (project p), the firm is considering sponsoring a pavilion at the upcorming world's fair. the pavilion would cost $800,000, and it is expected to result in $5million of incremental cash inflows during its 1 year of operation. however, it would then then take another year, and $5 million costs, to demolish the site and return it to tis original condition. thus, project p's expected net cash flows look like this(in millions of dollars): 0 1 2 - $ 0.8 $5.0 -$5.0the project is estimated to be of average risk, so its wacc is 10%.(1) what is project p's npv ? what is its irr ? its mirr ? (2) draw project p's npv profile. does project p have normal or nonnormal cash flows ? should this project be accepted ? explain.

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