Price of inflows as on 12 months 2=Annual coins flows/WACC
=350,000/zero.12
=$2916666.67
hence gift fee of inflows=cost of inflows as on year 2*present fee of discounting aspect(fee%,time period)
=2916666.67/1.12
=$2604166.sixty seven
the present cost of outflows=137,000+2,750,000/1.12
=$2592357.14
NPV=gift value of the inflows-present value of outflows
=2604166.sixty seven-2592357.14
=$11809.52(Approx)
While a high share price discourages trading in the company's stock, it advertises the company's stellar performance to existing and potential investors.
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