Your firm is half-way through a six year project with the following forecast and actual cash flows:
Original Forecast Cash Flows
CF1 = 3.40 million
CF2 = 2.90 million
CF3 = 3.10 million
CF4 = 2.95 million
CF5 = 3.25 million
CF6 = 3.00 million
Actual Cash Flows to Date
CF1 = 3.20 million
CF2 = 2.75 million
CF3 = 3.00 million
The original forecasted project investment was $10 million, but the actual investment was $12 million. The original project hurdle rate was 10.50% and the current hurdle rate is 11.50%. What is the revised net present value of this project? Please show calculations.
a) 351,404
b) 559,254
c) 709,143
d) None of the above