Assume General Motors has a weighted average cost of capital of 10%. GM is considering investing in a new plant that will save the company $30 million over each of the first two years, and then $15 million each year thereafter
If the investment is $150 million, what is the net present value (NPV) of the project?
A) $18.2 million
B) $20.8 million
C) $23.4 million
D) $26.0 million
Answer: D
Business
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