Business finance Course assessment
Question # 50039 | Business & Finance | 4 months ago |
---|
$10 |
---|
The course assessments should be completed in a Microsoft Word document or Adobe PDF. Your response to this course assessment should be one page in length, double spaced, and Times New Roman font with one-inch margins. Please be sure to follow APA or MLA format and cite material from the course or external academic sources.
Deficit Corp. management has determined that they will be $50 million short of being able to pay the firm’s debt obligations at the end of this year. Management has identified a positive NPV project that will require a great deal of effort on their part. However, this project is expected to generate only $40 million at the end of the year. Assume that all the members of Deficit’s management team will lose their jobs if the firm goes into bankruptcy at the end of the year. How likely is management to take the positive NPV project? If management declines the project, what kind of cost will Deficit’s stockholders incur?
