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An american firm with a WACC of 10% is evaluating a 3-year project with the...

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Finance

An american firm with a WACC of 10% is evaluating a 3-year project with the following after-tax, incremental cash flows (Note: the exchange rate is expected to be $1.00 forever)

Currency Year 0 Year 1 Year 2 Year 3

USD ($) -14 million +3 million +7 million +9 million

Euro () -3 million +3 million +3 million -3 million

a. The project should be rejected because the NPV is less than 10%

b. The project should be accepted because the IRR is 7.15%

c. The project should be accepted because the NPV is $1.23 million

d. The project should be rejected because the NPV is negative

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