A proposed project lasts three years and has an initial investment of $200,000. The after tax cash

Question:

A proposed project lasts three years and has an initial investment of $200,000. The after tax cash flows are estimated at $60,000 for year 1, $120,000 for year 2, and $135,000 for year 3. The firm has a target debt/equity ratio of 1.2. The firm's is 14% and its is 9%. The tax rate is 34%. What is the NPV of this project?
A) -$12,370
B) $13,687
C) $37,723
D) $46,120
E) $57,185
Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Cost Of Equity
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