Last month, Amang Juan analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the BSP took actions that changed interest rates and...


Last month, Amang Juan analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the BSP took actions that changed interest rates and therefore the firm's WACC. BSP’s action did not affect the forecasted cash flows. By how much did the change in the WACC affect the project's forecasted NPV?



























Old WACC:



10.00%



New WACC:



11.25%



Year



0



1



2



3



Cash flows



−$1,000



$410



$410



$410




Jun 08, 2022
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