5. A project is expected to cost 500 crore. The project is expected to generate after-tax cash...
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5. A project is expected to cost 500 crore. The project is expected to generate after-tax cash flows of *80 crore per annum over its estimated economic life of 15 years. The firm's cost of capital is 12.5 per cent, and the risk-free rate is 7.8 per cent. The firm thinks that the cash flows will fluctuate and variance of the value of the cash flows will be 0.076. As an alternative to taking up the project now, it is thinking of delaying the project. What should the firm do?.
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