Question

Lasik Vision Inc. recently analyzed the project whose cash flows are shown below. However, before Lasik...

Lasik Vision Inc. recently analyzed the project whose cash flows are shown below. However, before Lasik decided to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firm's WACC. The Fed'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 = 8.00%         New WACC = 8.25%
Year       0                 1                 2                 3
CF       -1,000           410             410             410

a. -$3.66

b. -$4.27

c. -$4.75

d. -$5.46

e. -$5.18

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